USD strengthens as markets await tariff news
The US dollar (USD) continues to strengthen. While USD sentiment remains generally constructive in anticipation of positive growth policies under President Trump, there is a lot of good news priced into the USD at the moment and the market is already positioned very long on the USD, Scotiabank Chief FX Strategist Shaun Osborne noted.
“That may leave the USD vulnerable to position adjustments on bad news or market doubts about how quickly Trump can advance his agenda. The key issue for traders in the short term is tariffs—how quickly and how hard they hit countries that are under immediate threat. The longer the wait for news, the greater the risk of some downside movement in the USD.”
“With little data to move the market today (US weekly claims and the KC Fed Manufacturing Index are the only US releases scheduled), the coming session should be relatively quiet. The DXY is heading for a second weekly loss, however, with price signals starting to lean slightly bearish on the charts.”
"JPY has underperformed this week but has a slight edge over other G10 currencies so far, despite the rise in US bond yields, as markets price in a 25bps hike at the BOJ policy decision (due tonight). Note that Japan also releases December CPI data tonight. Australia releases PMIs."
Source: FXStreet