AccuTrade2000

AccuTrade2000

During President Trump's first term in office, we felt the sequencing of tax cuts (late 2017) and then tariffs (March 2018-August 2019) were key reasons for a strengthening dollar. In other words, the US economy had some fiscal support before tariff wars were waged. What seems to be the case today is that Washington is engaging in protectionism very early in its...

AccuTrade2000

EUR/USD had a decent rally yesterday as investors focused on the explosive rally in European defence stocks. That Europe needs to spend a lot more on defence now is not in doubt. The question is what does it mean for FX? Can European defence spending move the needle on European growth and curtail some of the ECB easing cycle? Our eurozone economic team doubts...

AccuTrade2000

Over the weekend, the EUR reversed some of the weakness seen on Friday as some element of a ‘peace dividend’ reemerged. That dividend was dented materially by Friday’s events at the White House, with progress towards a US- sponsored ceasefire collapsing. Since then, European leaders have met and are pushing for extra defence spending, as well as a European-driven...

AccuTrade2000

With mere hours to go before the US potentially imposes 25% tariffs on Canada, the currency is proving remarkably stable. True, USD-CAD has moved higher over the last week, but this has only brought it back into line with 2Y yield differentials. There is no evidence of any risk premium in the CAD to take account of the adverse economic impact of possible tariffs....

AccuTrade2000

The USD faces a complicated week ahead with a multitude of forces in play. We believe the risks are tilted towards USD strength. On the geopolitical front, the FX impact of the fractious meeting between US President Trump and Ukraine’s President Zelenskiy has been modest. But uncertainty remains high. Separately, the markets will also have to digest developments...

AccuTrade2000

The USD outlook started to improve again last week in response to more tariff tape bombs by President Donald Trump as well as growing uncertainty about global geopolitical developments. The currency could remain supported in the near term given that: (1) Trump’s trade war could start in earnest on 4 March with tariffs on Canada and Mexico and continue with metal...

AccuTrade2000

Outside of its very modest steel and aluminium exports to the US, Australia is yet to be directly significantly touched by US President Donald Trump’s tariffs. Even if/when reciprocal tariffs come into effect next month, Australia could face only modest tariffs based on its tariff differentials with the US. But, it is the tariffs that the US is levying on China...

AccuTrade2000

Following the acrimonious meeting between the US and Ukrainian Presidents in the White House last Friday, the leaders of most EU member states, Canada, the UK and the European Commission met yesterday in London to discuss plans to achieve a lasting peace in Ukraine. Official comments after the “Ukraine summit” signalled willingness to increase support for Ukraine...

AccuTrade2000

 USD/JPY has experienced a steady decline after carving out a lower high at 158.85 than the one achieved in 2024 at 162. It recently gave up the 200-DMA and has retested December trough of 148.60, which is an interim support. Daily MACD has dipped below equilibrium line after posting negative divergence denoting prevalence of downward momentum.  If a short-term...

AccuTrade2000

 GBP/USD recently broke out from a base resulting in extension of rebound. Daily MACD has entered positive territory highlighting prevalence of upward momentum. Ongoing up move could persist towards the 200-DMA at 1.2785/1.2810 which is likely to be a potential resistance zone.  Ascending trend line drawn since January at 1.2450 is near term support.

AccuTrade2000

DOLLAR INDEX: 200-DMA AT 105.40/105.10 IS KEY SUPPORT  The Dollar Index faced strong resistance near 110.15 in January and failed to overcome this on second attempt. It has gradually reintegrated within previous multiyear range which normally points towards lack of upward momentum. This is also highlighted by the daily MACD, which formed negative divergence and...

AccuTrade2000

EUR/USD: BREAKOUT ABOVE 1.0535 WOULD CONFIRM LARGER BOUNCE  EUR/USD has experienced a gradual rebound after finding support at 1.0140 in February. It has established itself above the 50-DMA denoting regain of upward momentum. The pair has formed a base recently and is in vicinity to the upper limit of 1.0535. Defence of the MA at 1.0400/1.0385 could result in...

AccuTrade2000

Tokyo’s inflation data surprised the market to the downside due to a larger-than- anticipated effect of the government’s energy subsidies. The data briefly weighed on the JPY as investors slightly reduced the chances of the BoJ continuing to raise rates around the middle of the year. But with BoJ Governor Kazuo Ueda previously communicating that he will be taking...

AccuTrade2000

US President Donald Trump’s announcements that tariffs on Canadian exports to the US will go into place as scheduled on 4 March has led to USD/CAD jumping above 1.44. With all eyes on the US administration’s tariff action, today’s Canadian GDP data is unlikely to provide much distraction, especially as (1) Q424 growth was initially seen matching the BoC’s forecast...

AccuTrade2000

Our US economist and the market are expecting the headline PCE inflation print to slow down to 2.5% YoY from 2.6% YoY in December. The more important core PCE deflator print – the Fed’s preferred US inflation measure – is expected to slow down more meaningfully to 2.6% YoY from 2.8% previously. If confirmed, US core inflation would slip to its lowest level since...

AccuTrade2000

Yet more tariff headlines from Trump, this time suggesting that they will be delayed for Canada and Mexico until the 2nd of April, before a White House official said Trump's previous March 4th deadline remained. Tariff fatigue is on everyone's lips, and I am inclined to ignore any headlines and see what actually happens next Tuesday, where I can see another climb...

AccuTrade2000

The franc is trading with no clear direction after the move lower in USDCHF was firmly halted at the 100 DMA at 0.8918. Some fresh tariff volatility last night as Trump looked to have delayed the Mexico/Canada tariffs on 4th March (although it was not wholly clear), whilst also sending the euro lower as he spoke about 25% tariffs on the Eurozone auto industry....

AccuTrade2000

Interesting headlines from Mimura last night: “DON'T SEE ANY DISPARITY BETWEEN RECENT YEN MOVES AND RECENT POSITIVE GDP, DOMESTIC INFLATION DATA” and “SIGNALS HE SHARES MARKET VIEW ON BOJ POLICY” – I guess this is not overly surprising given the market narrative, but the JPY is moving quickly and there is clearly zero pushback in Japan. Our conviction remains...