Trump surprises with 50% Brazil tariff
President Trump stunned markets by announcing a 50% tariff on Brazilian goods, far above the 10% rate previously threatened for BRICS nations.
Trump also set a 20% tariff on Philippine goods (up from 17%), a 30% rate on Sri Lanka (down from 44%), Libya, Algeria, and Iraq (down from 39%), and a 25% rate on Brunei and Moldova.
US assets remained resilient, with Treasuries and equities gaining. US equities closed higher, led by tech, but extended long positioning in the Nasdaq 100 (+0.94%) leaves it vulnerable to near-term profit-taking. July seasonality remains a tailwind, but incoming earnings could pose a risk.
Crude oil futures ended unchanged, with front-end Brent holding above $70, as the market awaits further developments. US crude inventories rose by 7.07 million barrels.
The Bank of England warned that UK bonds could face forced selling by highly leveraged hedge funds, putting the pound under pressure.
Indian rupee (INR) and Chinese yuan (CNH) also at risk as markets brace for the possibility of higher tariffs elsewhere. The risk of a squeeze higher in USD remains.
Fed leans toward rate cuts, USD/SGD builds momentum
Most Fed officials support cutting rates this year, according to the June meeting minutes. While some flagged tariffs as a lasting inflation risk, others saw only a limited impact. A few members were open to a July rate cut.
Many also expect the job market to soften further.
In Asia FX, USD/SGD continues to gain traction—hovering near the 21-day moving average of 1.2800.
We previously stated that USD buyers may look to take advantage, given that it had bounced off its decade-low of 1.2698. The next key resistance for the pair lies at the 50-day EMA of 1.2890.
BOJ newcomer flags inflation risks, USD/JPY may test resistance
New BoJ board member Koeda sees inflation as driven by rising costs—especially food. She believes the core inflation rate remains below 2%, and warns that second-round effects could still play out. In a Bloomberg interview, Koeda said economic uncertainty makes it hard to suggest clear policy moves for now.
Although her remarks might sound like a warning, she’s far from hawkish. In her view, Japan’s inflation isn’t coming from strong demand, it’s not organic.
In FX, USD/JPY has climbed off the 21-day and 50-day moving averages of 145.09 and 145.11. Momentum looks positive, with the next resistance level around 148.15. SGD/JPY is also pushing higher. The next hurdle? The key 116.00 mark
Aussie steady as markets digest FOMC minutes and tariff news
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 7 – 12 July
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
