The main news overnight is that President-elect Donald Trump has vowed to implement his "America First" policies. This includes additional tariffs on China as well as the U.S.'s neighbours. Trump announced plans to impose an additional 10% tariff on goods from China and 25% tariffs on all products from Mexico and Canada in posts on his Truth Social network. The Canadian dollar fell to a four-year low, trading at 1.4178, while the peso approached its weakest level since 2022. China’s yuan also edged lower.
On the data front, today brings the Fed minutes, U.S. new home sales, and consumer confidence. Trading currently appears straightforward: the ECB is priced at -148 basis points over the next year, compared to the Fed’s -62 basis points for the same period. Unless data significantly shifts this dynamic, I remain in "sell the EURUSD rally" mode.
In other markets, Bitcoin rose 1% to $94,658.32, Ether fell 0.3% to $3,429.68, West Texas Intermediate crude increased 0.2% to $69.05 a barrel, and spot gold fell 0.1% to $2,622.06 an ounce.
Finally, Formula 1 announced an agreement in principle with General Motors (GM) to bring GM/Cadillac as the 11th team to the Formula 1 grid in 2026. Meanwhile, Champions League football returns tonight.
