Forex News Timeline

Thursday, February 13, 2025

The White House said late Wednesday that US President Donald Trump could announce his reciprocal tariff plan before he meets with Indian Prime Minister Narendra Modi on Thursday, per CNBC.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} The White House said late Wednesday that US President Donald Trump could announce his reciprocal tariff plan before he meets with Indian Prime Minister Narendra Modi on Thursday, per CNBC. 

Trump recently said he planned to slap reciprocal tariffs on “every country” that imposes import duties on the United States

On Monday, Trump signed an order to impose 25% tariffs on steel and aluminum imports.  Market reaction   At the time of writing, the US dollar Index (DXY) is trading 0.02% lower on the day to trade at 107.98. Tariffs FAQs What are tariffs? Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas. What is the difference between taxes and tariffs? Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers. Are tariffs good or bad? There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs. What is US President Donald Trump’s tariff plan? During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.  

The USD/CAD pair trades on a stronger note near 1.4305 during the late American session on Wednesday.

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The Bank of Canada (BoC) released its latest Meeting Minutes on Wednesday. The BoC governing council noted that retaliatory measures by Canada and other nations would put upward pressure on inflation. The Canadian central bank governing council added that increased uncertainty due to the US tariff threat also supported the case for a cut. The BoC emphasized that even if no tariffs were imposed, a long period of uncertainty would almost certainly damage business investment.

Meanwhile, crude oil prices edge tumbles on the day as US President Donald Trump called Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy to discuss ending the war in Ukraine. This, in turn, drags the commodity-linked Loonie lower and creates a tailwind for USD/CAD. It's worth noting that Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.

Wednesday’s data showed the Consumer Price Index (CPI) grew by more than expected at the start of the year. The so-called core CPI, which excludes food and energy costs, increased 0.4% MoM in January versus 0.2% prior, the largest rise since March 2024. Following the new data, traders expected just one quarter-point rate cut this year, down from two reductions before the CPI report. 

Federal Reserve (Fed) Chair Jerome Powell said the recent inflation data showed that while the central bank has made substantial progress toward taming inflation, there is still more work to do. The cautious stance of the US central bank is likely to support the Greenback in the near term.  Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
 

The NZD/USD pair saw mild losses on Wednesday, retreating to 0.5650 as selling pressure returned after Tuesday’s attempt to regain higher ground.

NZD/USD edges lower to 0.5650 on Wednesday, reversing Tuesday’s attempt to reclaim the 20-day SMA.Technical indicators signal waning momentum, with RSI declining and MACD showing neutral conditions.A decisive break below 0.5650 could reinforce bearish pressure, while buyers must defend this level to avoid deeper losses.The NZD/USD pair saw mild losses on Wednesday, retreating to 0.5650 as selling pressure returned after Tuesday’s attempt to regain higher ground. The pair remains locked in a battle against its 20-day Simple Moving Average (SMA), a critical threshold that could determine the near-term outlook. A failure to hold above this level may open the door to further downside movement. Technical indicators paint a cautious picture. The Relative Strength Index (RSI) is declining  at 49, signaling growing selling interest, while the Moving Average Convergence Divergence (MACD) histogram remains flat with green bars, suggesting a lack of strong directional momentum. This combination indicates a market in consolidation, with neither bulls nor bears taking full control. From a structural standpoint, 0.5650 serves as a pivotal level. A clear break below this threshold could pave the way toward 0.5600, while sustained buying above the 20-day SMA would be required for any meaningful bullish reversal, with initial resistance seen at 0.5685 and 0.5700. NZD/USD daily chart

The Australian Dollar (AUD) extends its sideways consolidation as AUD/USD softens to around 0.6260 in Wednesday’s session, falling 0.30% on the day.

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The pair has succumbed to selling pressure after briefly flirting with the key 0.6300 hurdle amid persistent risk-off sentiment while markets assess inflation data from the United States (US) and Federal Reserve’s (Fed) Chair Jerome Powell’s testimony before the US Congress. Daily Digest Market Movers: Aussie under pressure amid US inflation and trade tension Recent US inflation data came in stronger than expected, with the headline US Consumer Price Index (CPI) rising 0.5% MoM (vs. a 0.3% forecast) and the core US CPI jumping 0.4% (exceeding expectations). This has reinforced the Fed’s hawkish stance and bolstered the US Dollar. In addition, Fed Chair Jerome Powell sounded cautious during his second testimony before the US Congress. He reaffirmed the Fed’s independence and rejected any political pressure to alter policy direction. He also stated that inflation progress has slowed, but the 2% target remains the central bank’s priority. On the home front, softer Q4 Consumer Price Index (CPI) data in Australia shows headline inflation at around 2.5% YoY (down from 2.8%), with the trimmed mean CPI falling to a three-year low of 3.2%. These figures have increased market expectations of a 25 basis point RBA rate cut in February, though ongoing trade tensions with China continue to pressure the Aussie. Despite some recovery in commodity prices, weak business activity in China remains a drag on the AUD. The US Dollar, meanwhile, has reasserted strength due to persistent risk aversion and expectations of a tighter Fed policy, limiting further gains for the AUD/USD pair. AUD/USD Technical Outlook: Consolidation with signs of cautious momentum The pair has struggled to break through the key 0.6300 resistance, highlighting persistent selling pressure amid a choppy session. The Relative Strength Index (RSI) stands at 55—indicating that, despite some buyer interest, momentum is not robust. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows rising green bars, hinting at a gradual build in bullish momentum. With support around 0.6200 and resistance near 0.6300, traders are closely monitoring the upcoming US economic data and RBA signals to determine the next directional move for AUD/USD.   Australian Dollar FAQs What key factors drive the Australian Dollar? 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. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? 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. How does the health of the Chinese Economy impact the Australian Dollar? 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. How does the price of Iron Ore impact the Australian Dollar? 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. How does the Trade Balance impact the Australian Dollar? 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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