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Malaysias Ministry of Trade: Not considering retaliatory tariffs.Vishnu Varathan, head of macro research for Asia (excluding Japan) at Mizuho Securities, said on April 3 that U.S. reciprocal tariffs may continue to be a source of economic headwinds. These tariffs may also "inadvertently intensify and increase vulnerability to adverse demand shocks." Varathan said: "Asia has been particularly hard hit, especially in Cambodia, Vietnam, Thailand and Indonesia." In addition, South Korea, Japan, India and the European Union have not been spared, while the United Kingdom, Australia and Singapore have been the least affected. Varathan added that, therefore, the pressure on Asian currencies, except for Japan, may continue.On April 3, the Wall Street Journal reported that German automaker Volkswagen will impose an "import fee" on cars affected by US President Trumps 25% tariff. The report cited a memo sent to retailers saying that Volkswagen has temporarily stopped rail transportation from Mexico and will temporarily keep cars arriving by ship from Europe at the port. According to the agencys analysis of tariff codes contained in the Federal Register, Trumps 25% auto tariff will cover more than $460 billion worth of auto and auto parts imports each year. According to the report, Volkswagen told its dealers that it will provide more details on the pricing strategy for cars affected by tariffs by mid-April and plans to start distributing the cars to stores by the end of the month.European Commission President Ursula von der Leyen: The global economy is expected to suffer significant losses. Uncertainty will rise sharply and trigger new protectionism.European Commission President Ursula von der Leyen: Europe will stand on the side of those countries directly affected.

Gold Price Prediction: XAU/USD struggles to extend gains on encouraging ADP Employment data from the United States

Daniel Rogers

Jan 06, 2023 11:12

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After falling to almost $1,825.00 during the late New York session, the gold price (XAU/USD) has tried a recovery. The precious metal is battling to continue its rebound as robust United States Automatic Data Processing (ADP) Employment Change data has prompted the risk of the Federal Reserve (Fed) maintaining higher interest rate stability for an extended duration.

 

S&P500 suffered a major sell-off from the market participants, displaying a risk-aversion theme, as bigger additions of fresh payrolls in the United States job market will require the Fed to sustain its aggressive position on interest rates for a longer term. This has also caused a possibility of recession in the US economy. The Employment Change (Dec) jumped to 235K in contrast to the predicted 150K and the previous release of 127K. In addition, the weekly Initial Jobless Claims (IJC) have decreased to 204K compared to the expected 225K.

 

The US Dollar Index (DXY) achieved a roaring rally after sustaining above the important resistance of 104.00 and rose to reach 105.00. In addition, 10-year US Treasury yields detected demand and rose to approximately 3.72 percent.

 

Investors will closely monitor Nonfarm Payrolls (NFP) data on Friday. After noticing optimistic signals from ADP Employment Change, it is quite likely that the US NFP will report data that exceeds expectations. The unemployment rate is expected to remain unchanged at 3.7%.


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