USD holds firm as markets eye tariffs and data
The dollar maintained modest gains to start the week as markets stayed hopeful for eventually lower tariff rates despite no notable developments.
US rates and equities remained intact while the USD strengthened modestly, particularly against EM currencies and risk-correlated pairs.
Markets digested the latest tariff tracker updates with MXN trending lower. India, Taiwan, Switzerland, and Israel still await tariff letters while trade deals remain elusive.
The average effective tariff rate is expected to land around 15-20%, though recent announcements suggest upside risk.
Oil futures trended lower as skepticism grew over Senate threats to impose 500% tariffs on countries purchasing Russian energy. Trump suggested 100% tariffs may be more appropriate if no deal emerges within 50 days.
US core CPI expectations sit at 0.3% median consensus for Tuesday’s release. Tariffs announced for August 1st create upside risk to the effective tariff rate.
JPY rates remain sensitive to election news with positioning driving ultra-long movements.
Trump tightens screws on Russia as Aussie climbs
President Donald Trump ramped up pressure on Vladimir Putin to end the war in Ukraine, announcing a 100% tariff threat on Russian goods. “We’re not buying it, but we’ll manufacture it — and they’re going to pay for it,” he declared from the Oval Office during talks with NATO Secretary General Mark Rutte. Trump also said NATO allies would foot the bill for supplying Ukraine with additional weapons.
Looking at risk sensitive FX, the Aussie dollar is holding firm above 21-day EMA support of 0.6534. It is currently near YTD highs and AUD sellers may look to take advantage.
Yuan likely under pressure as China races exports
China’s trade surplus jumped to $114.7 billion in June, up from $103.2 billion the month before, as exporters raced to lock in gains ahead of an August 12 deadline on a fragile trade truce with the US.
Exports surged 5.8% year over year, beating expectations, while imports edged up 1.1% in a recovery from May’s decline. The rush to ship goods signals mounting urgency from Chinese businesses navigating uncertain trade winds. On the currency front, the dollar-yuan pair remains below the 7.2000 level. Traders are watching resistance zones around 21-day EMA of 7.1762, and 50-day EMA of 7.1937 next. With momentum building, dollar buyers may be eyeing their next move.
Antipodeans down amid elusive trade progress
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 14 – 19 July
All times AEST
Have a question? [email protected]
*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.
