ACY

The reintroduction of protectionist trade policies by the Trump administration is once again stirring uncertainty in global markets, with Japan emerging as a key player affected by the shifting dynamics.

Gold has kicked off 2025 with an explosive start, consistently reaching new record highs as investors seek safety amidst a volatile economic and geopolitical landscape. With escalating trade tensions, shifting central bank strategies, and uncertainty surrounding U.S. monetary policy, gold’s appeal as a safe haven asset remains stronger than ever.

President Donald Trump's return to the White House in Yesterday has reignited discussions about the potential impacts of his economic policies on the USD and the nation's monetary framework. Drawing from his previous tenure (2017-2021), we can anticipate certain patterns, though the current economic landscape presents new challenges and variables.

Last Friday’s non-farm payroll (NFP) data sent shockwaves through the US Stock markets, igniting a flurry of activity and significant price movements. The US dollar continued its relentless march upward, leaving currencies like the pound, euro, Aussie, and Kiwi tumbling. Meanwhile, equities faltered as inflation fears and interest rate uncertainty gripped investors.

The latest Federal Open Market Committee (FOMC) minutes and insights from Governor Christopher Waller provide a nuanced view of the Federal Reserve’s approach to monetary policy in early 2025. These developments highlight the central bank's cautious but forward-looking stance amidst persistent inflation concerns and evolving labour market conditions.

I’ve noticed that recently the market had some significant shifts, with recent data releases and central bank communications shaping market sentiment across major economies. A key focus remains on inflationary pressures in the United States, evolving monetary policy signals from the Bank of Japan (BoJ), and fiscal adjustments in Europe. Together, these dynamics have triggered notable currency movements and investor expectations.

Inflation is moving faster than the days themselves, and today’s market data sheds light on where we’re heading. The U.S. core CPI figures were released, surprising many, including me. The core CPI came in at 0.2%, lower than the expected 0.3%, while the regular CPI landed as anticipated at 0.4%. While the drop may seem minor, it’s an indication that inflation, though still sticky, is starting to slow down.

In December, US headline inflation climbed to 0.4% month-on-month, outpacing the prior month and Bloomberg's consensus estimate of 0.3%.

As inflation continues to shape the financial landscape, mastering its intricacies will remain indispensable for success in the forex market.