USD/CNH could stay below 7.30 for now, despite Trump threatening to impose a 10% US tariff on Chinese goods comes February 1, OCBC’s FX & Credit Strategist Chang Wei Liang notes.

Trump holds back on introducing universal tariffs for now

“In his Davos speech yesterday, Trump spoke positively about his relationship with President Xi, saying that all that he was seeking is a fair trading relationship with China. This suggests that the outcome of US-China negotiations will drive any tariff decisions, following an earlier call between the two leaders to discuss trade, fentanyl, and TikTok.”

“Trump has held back on introducing universal tariffs so far, but he has also directed the US Commerce and Treasury Departments to probe economic and national security risks of large trade deficits, and recommend appropriate measures.”