ForexLive Asia-Pacific FX news wrap:Trump Canada, Mexico tariffs remarks trigger FX swings

• MoF’s Mimura says won’t comment on FX levels
• MoF’s Mimura speaking, not mentioning FX issues
• USD/JPY drops back under 155.00 and to a fresh low for the day
• Trump’s Tik Tok threat to China – no deal could mean tariffs
• Trump orders suspension of new offshore wind power leasing
• Australian weekly consumer confidence survey drops to even more pessimistic
• Japan finance minister Kato expects BoJ to hit 2% inflation target with approprate policy
• Trump has ended the ban on new exporting liquefied natural gas (LNG)
• Trump says will straighten out deficit with EU with tariffs or by them buying our oil &gas
• Trump floats the idea of universal tariff, says not ready for that yet
• PBOC sets USD/ CNY central rate at 7.1703 (vs. estimate at 7.2888)
• USD/JPY bounce from five week low on Trump tariff remark
• CAD getting smashed on Trump tariff comments
• Trump says thinking in terms of 25% tariffs on Mexico and Canada
• Trump rescinds Biden’s EV mandate – eyes on TSLA
• USD/JPY traded under 155.00
• President Trump has signed a large number of executive orders – none on tariffs
• Trump speaking – addressing energy issues: reaffirms the policy is to “drill baby drill”
• Draft Trump memo directs investigation, remedy of persistent US trade deficits
• 7 days, 4 major central bank decisions (BoJ, Federal Reserve, European Central Bank, BoC)
• European Union finance ministers met Monday, energy prices were a hot topic
• More on that Wall Street Journal story that triggered to US dollar sell off (big time!)
• More on that Tesla car that crashed – questions over auto-pilot
• New Zealand data – December retail sales indicator +2% m/m and -1% y/y
• New Zealand services PMI (December 2024) 47.9 (prior 49.1)
• Economic calendar in Asia Tuesday, January 21, 2025 – not a lot
• Trade ideas thread – Tuesday, 21 January, insightful charts, technical analysis, ideas
• Trump is expected to lift the freeze on supplying one ton bombs to Israel
• Forexlive Americas FX news wrap: Trump takes office

Trump
signed a long list of Executive Orders late in the US afternoon, but
did not do so on tariffs. He did, however, float a number of ideas on
what he might do with tariffs:

• 25%
  tariffs on Mexico & Canada could start in 10 days
• China
  could be hit with major tariffs if they don’t sell TikTok, suggests
  100% as possibility
• A
  universal tariff on all countries is still on the table

It
was that first remark, 25% for Mexico & Canada in ten days that
hit markets like a hammer. Major FX dropped against a resurgent US
dollar. USD/CAD rose to circa 1.4515, while EUR, AUD, NZD, GBP, CHF
and JPY dropped hard.

USD/JPY
had dipped briefly below 155.00 before it was shunted to highs around
156.20.

USD/JPY
began dropping away again as Trump’s remarks were examined
in light of him requesting a report from the Secretary of Commerce by
April 1, 2025. USD/JPY fully retraced and then dropped under 155.00
to lows circa 154.79.

For
those who were around for Trump’s first term you’ll recall what
he says does not always match up with facts (in this case April 1 is
not 10 ten days away!), but he does create market movement!

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