Cautious Sentiment Ahead of Next Week’s Start
Market Focus: Trump Inauguration Ceremony
- Date: Next Monday (20th)
- Key Highlights:
- Inaugural Address
- Expected to outline broad policy directions on issues like environment, immigration, and education.
- Executive Orders
- Multiple orders are expected on the first day, with specific attention on tariff policies.
- Tariff Measures in Focus:
- 25% tariff on Mexico and Canada.
- Up to 60% tariff on China.
- Universal tariffs of 10–20% applied globally.
- Inaugural Address
These policies could lead to:
- USD buying due to rising U.S. inflation expectations.
- Selling of commodity currencies due to concerns over reduced global trade.
Today’s Market Outlook
- Ahead of Trump’s inauguration, a cautious tone is expected.
- Position adjustments and unwinding are likely to dominate, with limited appetite for aggressive new positions.
- Given recent USD selling, today may see a preference for USD buying.
Currency Pair Outlook
- USD/JPY
- Expected Range: Recovery attempts targeting the 156 level.
- Context: Temporary support from USD-buying sentiment.
- EUR/USD
- Expected Range: Consolidation around 1.03.
- Focus: Further USD strength may drive the pair to test 1.0250.
Summary
- With markets awaiting Trump’s inauguration and policy announcements, a wait-and-see approach is likely to dominate today.
- While position adjustments will be the main activity, USD-buying may slightly prevail.
- Significant market moves are expected to commence next Monday, emphasizing the need for cautious position management.
Note: Trump administration policies could have profound effects on major currency pairs. Stay alert and maintain flexibility to adapt to unfolding developments.
