ForexLive Asia-Pacific FX news wrap: USD bounces back a little

• Federal Reserve Daly and Jefferson speaking on Tuesday, February 4, 2025
• Financial Times: China’s exporters to step up offshoring to beat Trump’s tariffs
• Bank of Japan Governor Ueda says aiming for 2% inflation on a sustainable basis
• Australian consumer confidence hit a 32-month high at 88.5 (prior 86.0)
• Trump says ‘great interest’ in TikTok
• Trump China tariffs – Trump says will talk with Xi “probably over the next 24 hours”
• USD strength has crept back in as China tariff implementation time nears
• Bullard – inflation will slow markedly this year, allowing lower Fed interest rates
• Bank of Japan Governor Ueda will be speaking in the Japanese parliament today
• Paul Tudor Jones warned Trump that “there’s no room for mistakes”, markets on shaky ground
• Trump is planning a US sovereign wealth fund
• ICYMI on Oil – U.S. shale industry and Saudi Arabia tell Trump they won’t boost output
• Fed’s Musalem makes no comments on the economy or monetary policy in his remarks
• Extra Trump tariffs on China are due to hit in a little over 5 hours
• US equity index futures have reopened for trade, both ES and NQ have jumped higher
• Here’s a forecast for 100bp of Reserve Bank of Australia interest rate cuts in 2025
• Forexlive Americas FX news wrap 3 Feb: Tariffs are postponed in Canada and Mexico.
• Fed’s Goolsbee sees risks that inflation could tick back up
• EU’s von der Leyen says will respond firmly if targeted by unfair or arbitrary tariffs
• New Zealand data – December building permits -5.6% m/m (prior +4.9%)
• Trump will pause tariffs on Canada for 30 days
• Trade ideas thread – Tuesday, 4 February, insightful charts, technical analysis, ideas

The
news in the session from the US was that Trump had paused tariffs on
Mexico and China for 30 days, which led to a fall for the US dollar
and a bounce back for risk.

During
the session here in Asia so far, the dollar has bounced back a little,
with EUR, AUD, NZD, yen, GBP, CAD all off their highs.

News
and data flow during the session has been very light, especially
compared to the manic Monday we had yesterday.

If
you don’t mind me pricking the relief bubble that has pumped up a
bit on the news that Mexico and Canada have both received a 30-day
reprieve, there has been no such offer made to China. At least not yet.

The
extra 10% tariff Trump said he will slap on China is due to take
effect at 1201 US Eastern time on Tuesday, February 4, 2025, which is
0501 GMT. While Trump has said he’ll be talking with Chinese
President Xi ‘within 24 hours’ we have had no news that any
conversation has taken place or any sign that the tariffs will not go
ahead. Something to watch in the hours ahead.

AUD turned back from its early high … the prospect of tariffs on China is still real.

This article was written by Eamonn Sheridan at www.forexlive.com.