Notícias do Mercado
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23:30
US President Donald Trump puts tariffs, sanctions on Colombia after it refuses deportation flights
On Sunday, US President Donald Trump imposed sweeping retaliatory measures on Colombia, including tariffs and sanctions, after the South American country refused to allow two military planes carrying deported migrants to land as part of the new US administration's immigration crackdown.
Trump said that he will order an emergency 25% tariff on all Colombian goods coming into the US, which will be raised to 50% in a week.Trump was using Colombia to warn other countries about the consequences of rejecting deportation flights, a White House official told Reuters on Sunday.
Colombian President Gustavo Petro ordered increase of import tariffs on US products in reaction to a similar decision by Trump.
Market reaction
At the press time, the US Dollar Index (DXY) is up 0.17% on the day to trade at 107.63.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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23:11
AUD/USD attracts some sellers to near 0.6300 ahead of Chinese PMI release
- AUD/USD softens to around 0.6300 in Monday’s early Asian session, down 0.19% on the day.
- US S&P Global Manufacturing PMI rose to 50.1 in January; Services PMI declined to 52.8.
- China announced new measures to promote equity index investments on Sunday.
The AUD/USD pair weakens to near 0.6300, snapping the three-day winning streak during the early Asian session on Monday. China’s fresh stimulus measures to promote its development of index investment products fail to boost the China-proxy Australian Dollar (AUD). Traders brace for the release of Chinese NBS Purchasing Managers Index (PMI) data, which are due later on Monday.
Data released by S&P Global on Friday showed that the US Composite PMI declined to 52.4 in January from 55.4 in December. Meanwhile, the Manufacturing PMI improved to 50.1 in January versus 49.4 prior, beating the estimation of 49.6. The Services PMI dropped to 52.8 in January from 56.8 in December, below the market consensus of 56.5.
The mixed US PMI reports and uncertainty surrounding the impact of US President Donald Trump's trade and immigration policies could support the US Federal Reserve's (Fed) cautious approach to cutting interest rates this year. This, in turn, could lift the US Dollar (USD) and create a headwind for the pair.
On the Aussie front, Chinese authorities on Sunday announced new measures to boost the development of index investment products, its latest effort to revive the ailing equity market. This action aims to achieve a significant increase in the scale and proportion of index investment in the capital market through efforts over a period of time. However, this headline fails to support the China-proxy Aussie as traders remain cautious ahead of the Chinese PMI data.
On Wednesday, the Australian Consumer Price Index (CPI) for the fourth quarter will be in the spotlight. This report could offer some hints about the Reserve Bank of Australia (RBA) rate path. Any signs of softer inflation could raise the bets on a February RBA rate reduction and signal a more dovish RBA rate path, which could weigh on the AUD in the near term.Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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22:38
China announces new measures to promote equity index investments
On Sunday, China announced new measures to boost the development of index investment products, its latest effort to revive the ailing equity market, per Bloomberg.
The China Securities Regulatory Commission (CSRC) stated that the government aims to achieve a significant increase in the scale and proportion of index investment in the capital market through efforts over a period of time.Market reaction
At the press time, the AUD/USD pair is down 0.13% on the day to trade at 0.6303.
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