BRICS Nations Face 100% Tariffs: Market Reactions
President Trump has threatened 100% tariffs on BRICS nations if they try to replace the U.S. dollar. This has impacted currency markets and drawn more attention to trade issues. Upcoming U.S. job openings data and central bank speeches are expected to increase market volatility. The U.S. dollar remains strong, but major currency pair movements are limited as traders wait for further updates.
Key Data Out Today
- ECB’s Cipollone Speech (08:00 GMT): Markets remain watchful for updates on Eurozone monetary policy.
- US JOLTS Job Openings (15:00 GMT): Consensus sits at 7.48M, slightly above the previous 7.443M, highlighting a still-tight labor market.
- RBNZ Governor Orr Speech (16:00 GMT): Any hawkish or dovish hints could impact the NZD amidst Trump-driven trade concerns.
- Fed Speeches: Remarks from Fed officials Kugler and Goolsbee could provide insights into the Fed’s policy outlook.
- Australian Data: AiG Industry Index and Judo Bank Composite/Services PMI figures offer insights into economic resilience Down Under.
Energy & Precious Metals
- Crude Oil and Brent: WTI crude is up 0.26% at $68.35, while Brent climbed 0.29% to $72.14. Trump’s tariff comments, while aimed at BRICS nations, have stirred demand concerns in energy markets.
- Gold: Edged up 0.16% to $2,646.36 per ounce, as geopolitical uncertainty drives safe-haven demand.
- Silver: Gained 0.96% to $30.89, continuing to outperform gold with increased industrial demand.
Currency Movements
EUR/USD
- EUR/USD: Down 0.10% to 1.0488, as geopolitical and trade uncertainties add to existing Eurozone growth concerns.
GBP/USD
- GBP/USD: Slightly lower at 1.2652, down 0.02%, as the pound shows limited reaction to geopolitical events but awaits further developments.
AUD/USD
AUD/USD: The Australian dollar trades at 0.6474, down slightly by 0.02%. Trump’s tariff warnings and concerns over BRICS trade moves have kept risk-sensitive currencies like the AUD subdued.
NZD/USD
NZD/USD: Marginally up 0.05% at 0.5880, bolstered by anticipation of RBNZ Governor Orr’s speech, although concerns about Trump’s trade threats linger.
USD/JPY
- USD/JPY: Up 0.29% to 150.02, with the yen weakening as geopolitical tensions shift attention to the US dollar as a safe haven.
USD/CNY
- USD/CNY: Up 0.12% to 7.2948, reflecting investor unease over China’s position within BRICS and the broader impact of Trump’s threats.
USD/CHF
- USD/CHF: Gained 0.13% to 0.8878, tracking the broader strength of the US dollar as markets remain risk-averse.
USD/CAD
- USD/CAD: Flat at 1.4042, with the Canadian dollar steady despite mild gains in crude oil prices.
USD/MXN
- USD/MXN and USD/INR: Both pairs remain steady, with MXN at 20.40 and INR at 84.74, the latter facing ongoing pressure from geopolitical tensions.
USD/INR
- USD/INR: The Indian rupee remains under pressure, with USD/INR trading at 84.74, near all-time lows. Trump’s tariff threats against BRICS nations have spurred fears of further capital outflows, weighing heavily on the rupee.
Things to Keep a Watch On:
- US JOLTS Job Openings (15:00 GMT): Labor market trends will be a critical driver for the USD and broader risk sentiment.
- Fed Speeches: Watch Kugler and Goolsbee for policy updates or hints of further tightening.
- RBNZ Governor Orr Speech: Comments on monetary policy or trade risks could move the NZD.
- Gold and Energy Prices: Geopolitical events and trade dynamics could drive further price volatility.
- BRICS Developments: Pay attention to any responses to Trump’s tariff threats, as these could further roil markets.
Trump and Geopolitics
Former President Trump has reignited trade tensions, warning BRICS nations against creating a new currency alternative to the US dollar. This comes alongside his threats to impose 100% tariffs on China, India, and Russia, a move that could have widespread implications for global trade and economic stability. Markets are watching closely for any retaliatory responses or further details on the proposed measures.