The US Dollar has edged broadly higher despite growing worries that the US is on the verge of a worrying position on global trade. President Trump had imposed tariffs on the import of solar panels and washing machines just as there had been great hopes of a strengthening global economy. Many analysts believe that his closing speech at Davos on Friday will take a decidedly protectionist tone and could result in an emerging market currency selloff that would eventually weigh on the greenback itself. Analysts say that currencies like the Chinese Yuan and the Korean Won would initially be hard hit but the repercussions will also negatively impact the Dollar, especially as world trade accounts for nearly 50% of global GDP
As reported at 11:04 am (GMT) in London, the EUR/USD was trading at $1.2245, down 0.11%; the pair has ranged from a session trough of $1.2219 to a peak of $1.22761. The GBP/USD was down 0.25% and trading at $1.3948; the pair earlier hit a trough of $1.3934 while the peak is at $1.34003. The AUD/USD is lower at $0.7966, down 0.6134% and off the session low of $0.79540. The USD/CAD was trading at C$1.24805, a gain of 0.27719, off the peak of C$1.24912.
BOJ Stands Pat on Policy
In Japan, the Yen fell after comments made by Haruhiko Kuroda, the governor of the Bank of Japan, quashed any investor speculation of a scale back in its current easing policy. The governor said that the BOJ was committed to continuing quantitative easing at the present time, but would re-examine the issue as needed in the future. Kuroda also said that it is the BOJ’s belief that its 2% inflation target would finally be met by the first quarter of 2020. The Bank of Japan kept interest rates at the current negative level of -0.1%, largely as expected by analysts. The USD/JPY pair is trading at 110.461 Yen, down 0.42%.