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US dollar dips across the board on signals that US tariffs may not be imposed immediately The dollar index was sharply down in early US trading on Monday (losing 1% so far) in immediate reaction on media report, saying that new US President will stop short on imposing new tariffs on his first day. Tariffs were among other measures on Trump’s list to be executed as soon as he officially becomes the President and current decision could be seen rather as a temporary delay, which brought a dash of optimism, than any other scenario. Trump’s administration has an investigation of trade issues (deficits and unfair trade practices) as a top priority and tariffs are likely to be used in a carrot and stick scenario, until target is reached. The US economy faces strong gap in trade exchange with the Eurozone and sees China as a major threat, though Trump may react differently this time and try to achieve the goals more diplomatic way. Daily studies are weaker, as the latest pullback broke some technical supports and completed Head and Shoulders pattern on daily chart. Bears pressure support at 108.00 (daily Kijun-sen) and eye next pivot at 107.60 (Fibo 23.6% of 99.84/110.00 rally / former higher base), violation of which to validate bearish signal and open way for deeper pullback towards 106.12 (top of rising daily Ichimoku cloud / Fibo 38.2%). On the other hand, larger bulls remain in play and current easing could be seen as a healthy correction, preceding fresh push higher. The notion is supported by expectations that Trump won’t move significantly away from his initial (dollar supportive) plan but would rather be more flexible in some situations. Res: 108.40; 109.00; 109.25; 110.00 Sup: 107.60; 106.97; 106.70; 106.12 #dollar #usd #trump #tariffs #technicalanalysis

As Trump takes office his voters want to see real wage gains and inflation tamed. But it’s hard to see how higher tariffs, deregulation & tax cuts will achieve that vision before a recession comes. Trump has six months to get it done before his mojo evaporates into frustration. After all, bluster works until the bluff is called. For example, if 10% tariffs are put on imports across the board, the dollar will rise and so will the trade deficit. That’s what happened in 2017 when tariffs were placed on China, Xi just devalued the yuan 10% and the trade deficit rose. The same thing will happen again. However, deregulation is always good, but another tax cut on top of the 2017 tax cut-- which drove a string of uninterrupted $2T deficits from then until now--- will surely yield a 4T deficit if a recession comes. How can interest rates go down without a recession if immigration goes to zero and tariffs push up prices of everything. Will deregulation and lower taxes create a boom? We will know the answer in six months. Until then risk is high and cash is king

USD/CAD extends gains on Trump tariffs spotlight. Yesterday the USDCAD pair drew a bullish candle with a long shadow on the top candle indicating a strong up accompanied by strong selling pressure. Price formed a high of 1.45947, a low of 1.43925, and a close of 1.44756 on FXOpen. Rising prices have made the Bollinger bands expand, indicating increased high volatility. President Trump has reiterated his intention to impose 25% tariffs on Canada and Mexico. He said the announcement would be made for various reasons, including the fentanyl issue, which caused shares of US automakers to decline. He also stated that the first tariffs for Canada and Mexico would take effect this Saturday. He hinted at a possible decision on oil and touched on the country's wood supply. Trump's tariffs are considered to have a significant impact on trade between the US, Canada and Mexico. US GDP yesterday was lower than previously in the fourth quarter, actual data showed 2.3% lower than expectations of 2.90% from the previous revision of 3.1%. Meanwhile, US Unemployment Claims fell 207k lower than expectations of 224k and the previous revision of 223k. Today Canada will release GDP which is predicted to fall -0.1% from the previous 0.3%. Investors will also focus on US Core PCE Price Index data, which is the Fed's most preferred inflation indicator. It is estimated that PCE will rise 0.2% from the previous 0.1%. The US will also release Employment Cost Index data which is expected to rise 0.9% from the previous 0.8%. #USDCAD #forextrading #forextrader #fxopen

The dollar starts the weak on the back foot, with rumours that Trump tariffs may be limited in scope weighing on the greenback. https://loom.ly/xNSXeDo #dollar #usd #greenback #tariffs #fxmarkets #foreignexchange #financialservices #fxtraders

Trump takes office in a week & has vowed to put 25% tariffs on Canada, Mexico & China which would put each one of them in a recession as an imported inflationary shock hits America, i.e., US manufacturers would have to raise prices. Oil prices have already risen due to new sanctions on Russia not to mention the effect of 25% tariffs on imported oil from Canada. To wit, bond yields are rising in fear of tariff driven inflation and the end of FED interest-rate cuts if the CPI remains elevated. However, Trump won’t actually follow through with his threat: he’s talking up outrageous tariffs to get deals out of Canada & Mexico to control their borders & to accept the “massive” deportation of illegals that will be coming from the US---really, “massive” will turn into a trickle because it’s impossible to even locate most of the illegals in the US. Therefore, Trump will not do “country-wide” tariffs for more than a month or two because the bond & stock markets will crash. No doubt US businesses would have to raise prices to offset higher tariff costs & the FED would quit cutting sooner. The reality is, Trump can’t “make America safe again” by making the US economy unsafe. The markets won’t put up with it.

Things That Stick Out: Monday Morning Edition US rates and the dollar are under pressure early Monday after an anonymously sourced Washington Post story claimed President-Elect Trump is considering a narrower tariff scheme than the proposals put forth during the campaign. The piece says that tariffs would only apply to ‘critical’ imports, presumably reducing the potential inflationary impact than imagined under a wider tariff scheme. Eh, we’ll see. Trump promptly denied the story, proving once again that relying on ‘sources’ in a Trump administration is an invitation to lose money. Also weighing on the rates/dollar complex was a miss on November Factory Orders and downward revisions to the latest PMI and Durable Goods reports. However, the thing that sticks out is a steepening of the Treasury curve to its widest point in 2 ½ years, with more than 20 corporate issuers on the docket Monday and a total of $50 billion in supply expected this week. $119 billion in Treasury coupons between 3-, 10-, and 30-years have been moved up to Monday, Tuesday, and Wednesday, respectively, to account for Thursday’s holiday in honor of former President Jimmy Carter. Broadly speaking, we see some cracks in the data and think that Trump’s inauguration later this month has a decent chance of being a ‘sell the news’ event after nearly three months of unbridled economic optimism across most sectors. So, if we were forced to make a trade, we’d be biased toward lower rates and a weaker USD in the near term. See original IGM post here: https://lnkd.in/emQQmTj2 IGM | Informa Connect #inflation #economy #interestrates #tariffs #Trump #federalreserve #financialmarkets #yieldcurve #bondmarket

Trump is back at the White House to be Powell’s new neighbour. With the Fed expected to cut rates today, how will this wrinkled relationship fair? Because, Trumps tariffs are the Fed’s fears. Read my latest story for The Economic Times.

Trump is trembling or does he have the right? The US can introduce tariffs and duties gradually - 2-5% per month to prevent sharp jumps in inflation. It's all classic: Donald Tariff made a statement, and now the new team has to rack their brains over how to implement it all so that it doesn't backfire on the economy. In addition, the newly-minted president hasn't seen the proposal yet. But we don't rule out that, in his opinion, the tariffs should have been in effect "yesterday". Who will suffer? First of all, the main economic partners: Canada, Mexico and China, which together account for more than 40% of the US trade turnover. The neighbors were promised to raise tariffs by 25%, which will be critical for the economies of these countries, since the US is the main market for Mexico and Canada (about 70% of all exports). The alternative is to become part of the "empire". We wrote about the historical expansion of the US territory here. Which products will be affected? Even the gradual introduction of tariffs could lead to higher prices for food, energy and other consumer goods, including gold, aluminum, wheat, corn and building materials. After all, Canada and Mexico are among the main suppliers of food to the United States. Who will benefit? Local manufacturers, whose production is concentrated in the States, come to the fore. In addition, given that more than half of US oil imports come from Canada, the American oil industry will be the main beneficiary of what is happening. Who will pay for this? As always, the consumer will pay for everything, since the tariffs will be transferred to prices, which have already grown in recent years above the Fed's target of 2% per year. Inflation will accelerate in the rest of the world as well. Conclusion? 🔎Tariffs are Trump's good old weapon, which will most likely be used 110% against both obvious "enemies" and intractable "friends" who, among other things, do not allow the American stars and stripes to flutter over Canada, Mexico and Greenland. And it is useless to argue with this, because is Trump a trembler or does he have the right? #USA #tariffs #economy #Trump #Mexico #Canada #Greenland

Abandon U.S Dollar President Donald Trump Threatens 100% Tariff on Countries That Turn Away From The U.S Dollar. A shift Away from Dollars Could Undermine The United States Ability to Find Deficits, Leading to Higer Interest Rates and Devaluation of Our Dollars. If the Our Dollar Collapses: The Cost of Our Imports Will Become More Expensive, and Our Government Wouldn't Be able to Borrow at Current Rates, Resulting in a Deficit That Would Need to be Pid by Increasing Taxes or Printing More Money. I Agree With President Trump, We Need NEW STRONG FIRM POLICY Against All These Countries That Started and/Or Looking Ditching the US Dollar, NOT Only By Threat But By Quick and Strong Action, 100% Tariffs Will Hurt Our Citizens and That's NOT Good Mr. President, We have Many Other Options That Will Hurt These Countries, and Their Economy's and Making Them Thinking Many Many Times Before do Something Like This. United States Dollar Representing us as Americans, it's Representing The Confidence in Our Economy, The Confidence in Our Financial System, The Confidence in The United States Government and Their Financial Institutions ... it's not a Piece of Paper, and They Must Knowing That. "Don't Play With Fire Because it Will Burn Your Hands First " Personal Opion

What Are the Odds of a 25% Tariff on Canadian Vehicles? Getting this on record before he takes office… Note….This is MY OPINION….but i watch it all closely a quick breakdown of how likely it is…and what the numbers might look like if we were betting in Vegas…(discussion only) -Odds of a full 25% tariff: +450 (18% implied probability). It’s a bold move that could devastate the Canadian economy, but the political and economic risks may outweigh the benefits for the U.S. -Odds of a reduced tariff (e.g.10-15%): -200 (67% implied probability). A lower tariff allows Trump to claim victory without causing as much collateral damage.(especially in swing states) -Odds of no tariff at all: +400 (20% implied probability). The most likely outcome? Trump uses the threat of tariffs as leverage to negotiate more favorable trade terms. -Over/Under Line: 12.5%. If a tariff happens, it’ll likely be below this threshold…but you never know with Trump! Canadian Dollar forecast for each scenario -25%- I think we will see 1.60/1.65 in a hurry -12.5%- 1.50/1.55 -None- - 1.45 DM me if you want a full breakdown of how I arrived at this. (my notes) I’ll also be publishing an in-depth piece on my personal website blog What are your thoughts on the matter?