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investingLive Asia-Pacific FX news wrap: Trump threatens tariffs on EU & UK over Greenland
Key Takeaways (30s Read)
Trump threatens tariffs on the EU and UK, impacting FX markets and currencies.
Trump has announced his plan to impose additional tariffs on the EU and UK regarding Greenland, starting February 1, 2026, with a 10% tariff on all goods sent to the US. This will increase to 25% on June 1, 2026. The EU and UK have indicated retaliation plans but prefer negotiations. In early FX trade, the USD gained ground against the EUR, GBP, AUD, and NZD, but the JPY strengthened against the USD. Specifically, USD/JPY dipped below 157.50 before bouncing back above 157.90. The EUR/USD rebounded sharply from below 1.1580 to above 1.1635. Japanese machinery orders fell 11%, raising expectations for a sales tax cut ahead of elections, causing bond yields to rise significantly. In contrast, China's Q4 GDP growth slowed to 4.5%, highlighting ongoing economic concerns. Overall, the geopolitical tensions influenced market sentiments, leading to a stronger USD and fluctuations in currency pairs.
AI Analyst
AI Opinion
"Trump's announcement of additional tariffs is significantly impacting the FX market, especially with the USD strengthening against other major currencies. The JPY shows resilience due to internal political developments and a recent decline in machinery orders. Meanwhile, poor economic indicators from China are compounding pressure on the dollar, suggesting a continued risk-on sentiment. The market will closely monitor the developments surrounding Trump's tariff strategy and the outcomes of Japan's PM press conference, as these will be crucial for future trading decisions. Political movements and their implications for economic indicators will require careful scrutiny moving forward."
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