On January 19, US President Donald Trump stated on a social media platform on the 17th local time that a 10% tariff will be imposed on all goods exported to the United States from Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, effective February 1, 2026. He indicated that this tariff measure will remain in place until an agreement is reached for the "complete and total purchase of Greenland." Should no agreement be reached, these tariff rates will increase to 25% starting June 1, 2026. Major EU member states condemned the aforementioned tariff threats related to Greenland on Sunday, labeling them as extortion. France proposed a series of unprecedented economic countermeasures. Options available to the EU include imposing a package of tariffs on US imports valued at 93 billion euros—a measure that was suspended for six months starting last August—as well as actions under the anti-coercion instrument, which could impact US trade or investment.
Furthermore, Japan's Finance Minister issued another warning that all options, including direct intervention in the foreign exchange market, are on the table to address the recent weakness of the yen. "I have stated many times that we will take bold action, including all available measures, if necessary," Finance Minister Sakura Katsurayama said last Friday. Her comments provided a boost to the yen. She also downplayed the view expressed by US Treasury Secretary Scott Bessent, who indicated a preference for the Bank of Japan to use policy tools to support the yen rather than intervening in the forex market. "We agreed that recent movements are excessive and do not reflect fundamentals," Katsurayama stated, referring to her talks with Bessent in Washington on Monday.
Key data to watch today include the Eurozone's Harmonized Index of Consumer Prices (HICP) year-on-year for December, Canada's unadjusted CPI year-on-year for December, and the US Conference Board Leading Indicators month-on-month for October.
Gold/USD Gold edged lower with a slight daily decline last Friday. Profit-taking exerted some selling pressure on the metal, while diminishing expectations for Federal Reserve interest rate cuts continued to weigh on gold. Additionally, a slight cooling of market risk aversion also contributed to the pressure on the safe-haven asset. During the early Asian session, gold gapped higher and hit a fresh record high, driven by increased risk aversion following US President Trump's tariff threats. The pair is currently trading around $4670. Resistance is seen near $4750 today, with support around $4600.
USD/JPY The USD/JPY pair moved lower on Friday, falling below the 158.00 level, and is currently trading around 157.80. Apart from profit-taking exerting downward pressure, concerns about potential intervention by Japanese authorities, fueled by warnings from Japan's Finance Minister, were the main factors weighing on the pair. However, a sustained rebound in the US Dollar Index limited the pair's losses. Resistance is anticipated near 158.50 today, while support lies around 157.00.
USD/CAD USD/CAD climbed modestly on Friday, closing with a slight daily gain, and is currently trading near 1.3890. The primary support came from a strengthening US Dollar Index, which was buoyed by reduced expectations for Fed rate cuts and positive US economic data released during the session. Nonetheless, rising crude oil prices, supported by geopolitical tensions, capped the pair's upside momentum. Resistance is eyed near 1.4000 today, with support located around 1.3800.
