Compass Global Markets' Blog

Market Update - 9th March 2018 - Trump Tariffs Get Go Ahead, Commodities Prices Decline While USD Surges

Posted by Patrick Downes on March 9, 2018 at 10:15 AM

The USD surged higher and commodities fell overnight as Trump followed through with plans to set high tariffs on the importation of steel and aluminium into the U.S while exempting immediate neighbors Canada and Mexico for 'national security' reasons. AUD/USD fell back below 0.7800 on the wholesale market while the USD moved higher against the Yen and EURO. Since Trump mentioned the tariff in early March commodities have been sinking with zinc, nickel, copper and iron ore all getting belted on the prospects that these tariffs may kick off a trade war with China who imports much of the worlds base metals but also the European Union and many other Asian nations. Personally I think it's quite overdone and considering much of the U.S's steel imports come from Canada (17%), the European Union (15%) and Mexico (9%), with two out of those three already exempted from the tariff then the tariffs may have little impact on the raw materials themselves. The real concern is whether China, Japan and Korea retaliate with their own trade tariffs, but this is a still unknown and perhaps a reason for the weakness in commodities prices. Markets hate uncertainty.

Some Chinese economic data is out today in consumer and producer prices and these always have some impact on the Aussie dollar and the Yuan. This data is followed by U.S non-farm payrolls numbers due early tomorrow morning which are typically seen as the Number 1 bit of economic data out of the U.S each month. Obviously quite a bit of risk for AUD/USD going into tonight particularly given the break below 0.7800 and the weaker commodities prices.


AUD/USD – 0.7786

AUD/GBP – 0.5635

AUD/EUR – 0.6324

AUD/NZD – 1.0723

AUD/JPY – 82.733

USD/BTC – $9,404


All Ords (XAO) – 6,046

Gold – A$1697/oz

Silver –  A$21.19/oz

WTI – US$60.24/barrel


CNY - CPI & PPI at 12.30pm

JPY - Interest Rate Decision & Monetary Policy Statement

GBP - Manufacturing Production at 8.30pm

USD - Non-Farm Payrolls & Unemployment Rate at 12.30am (tomorrow morning)

***Above rates are indicative wholesale rates and intended as a guide only***

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

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