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Hello everyone, today Avatrade Avatrade Ava Foreign Exchange will bring you "[Ava Ava Foreign Exchange Decision Analysis]: The US dollar index is still below 104, and Trump has made concessions to Canada." Hope it will be helpful to you! The original content is as follows:
The U.S. dollar index fell on Tuesday as U.S. President Trump threatened to impose new tariffs on Canada, triggering market volatility, and the dollar fell against the Canadian dollar after hitting a one-week high. Meanwhile, the market was optimistic about Ukraine's proposal to agree to a 30-day ceasefire, and the euro climbed to a five-month high.
The US dollar is still weak overall, mainly dragged down by doubts about trade and economic growth. The three major Wall Street indexes - the S&P 500, the Nasdaq and the Dow closed down collectively on Tuesday.
Steve Englander, head of foreign exchange research and North America macro strategy at Standard Chartered's New York branch, said: "All fragile markets remain weak: German Treasury yields continue to rise, while U.S. stocks remain sluggish."
Trump doubled the originally planned tariffs on Canadian steel and aluminum products to 50% after Ontario, Canada, further exacerbated trade tensions. However, senior White House trade adviser Navalo said Tuesday afternoon that Trump has decided not to raise tariffs on Canadian steel and aluminum to 50% on Wednesday.
After Trump threatened to double the tariffs on Canadian steel and aluminum to 50%, the US dollar/Canadian dollar soared more than 100 points in the short term, reaching a high of 1.4521; as Trump changed his policy, the Canadian dollar strengthened sharply, and the US dollar/Canadian fell to 1.4379 at the lowest. As of Tuesday's closing, the US dollar/Canadian dollar was basically the same as the previous trading day, closing at 1.4432.
On the other hand, Ukraine agreed to immediately implement a 30-day ceasefire agreement during talks with U.S. officials in Saudi Arabia. U.S. Secretary of State Rubio said the U.S. will hand over the proposal to Russia, saying the decision is now in placeIn Moscow's hands.
MonexUSA trading director Juan Perez said that the increase in European defense spending, coupled with the expected ceasefire in Ukraine, is a positive factor for the euro.
Perez pointed out: "Even if the ceasefire lasts only for one month, it means that there may be substantial progress between Russia and Ukraine, which is an excellent signal for the euro."
Asian Market
Bank of Japan Governor Kazuo Ueda talked about the recent rise in bond yields and pointed out that "I have not seen a big difference between our views and the market's views."
Ueda emphasized in his speech at Congress that the "big determinant" of long-term interest rates is the market's expectations of the central bank's short-term policy interest rates.
He added that “it is natural for long-term interest rates to change in a way that reflects such market forecasts.” His avatradescn.comments avatradescn.come as Japan's benchmark 10-year bond yield surged to a 16-year high of 1.575% on Monday.
In addition, Japan's latest inflation data showed that the annual wholesale inflation rate slowed slightly in February. The avatradescn.commodity price index of enterprises that tracks the prices of goods and services charged by enterprises rose by 4.0% year-on-year, in line with market expectations, lower than the year-on-year increase of 4.2% in January.
European Market
In a speech yesterday, Olli Rehn, a member of the European Central Bank governing board of Finland, highlighted the potential damage that U.S. tariffs could cause to global economic activity.
According to the Bank of Finland, a 25% import tariff on goods imported from the euro zone and a 20% import tariff on goods imported from China, coupled with reciprocity measures in these regions, will reduce global output by more than 0.5% this year and next two years
Rehn stressed that this looming trade conflict will have deflation and inflationary impacts on Europe. “It is worth recalling that if growth in the world and euro zone economy slows down avatradescn.compared to forecasts, this will put downward pressure on inflation,” Rehn said.
In view of this uncertainty, he noted that the ECB will assess new economic data before meeting in April before avatradescn.committing to further rate cuts or suspending rate hikes.
U.S. market
The vacancies for JOLTs in the United States rose to 7.74 million in January, higher than the expected 7.63 million. Traders then stepped up betting on the Fed's interest rate cut.
U.S. Trade Policy - Trump threatens to impose a 50% tariff on all steel and aluminum products from Canada and destroy the Canadian automobile industry through tariffs; Ontario, Canada immediately suspends the 25% surcharge on electricity transmitted to the United States; White House officials say that the 50% tariff on Canadian steel and aluminum will be cancelled; avatradescn.comThe two sides have continued for about 6 trade warsHour.
Trump: There is no way to see an economic recession, the US economy will usher in prosperity, and market selling has nothing to do with me. Violence against Tesla dealers will be marked as domestic terrorism.
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