Bitcoin and Ethereum Gain on U.S. Tariff Retreat Speculation
Speculation of a retreat in U.S. tariffs on Chinese goods caused bitcoin and ethereum to gain
Asian stock futures pointed to modest gains as reports emerged that the US may soon rollback tariffs on Chinese consumer goods. The commodity and risk currencies rallied overnight following the reports.
The Australian dollar rose by as much as 1.1%, while the South African rand increased by almost 1%. The offshore yuan gained 0.1%
President Joe Biden could announce as soon as this week that he is rolling back some tariffs -- and may launch a new probe into industrial subsidies that could result in more duties in strategic areas like technology. Biden has not yet made a final decision, and the timing might be pushed back, according to people familiar with the deliberations.
The Wall Street Journal reported that a decision could be made as soon as this week.
Neil Jones, foreign-exchange sales head at Mizuho bank Ltd., said: "The market is responding positively to the headline." This is exactly what commodity currencies need right now.
The rand and the Australian dollar, which are both commodity-linked and risk currencies, have been hit by fears of a slowdown in the economy and increasing trade tariffs. Both currencies are still trading at their lowest levels since 2020.
Some strategists warned that the moves may not be sustainable, given the direction of tighter global monetary policy.
"We don't want this rally to go too far," said Adam Cole, chief currency strategist at RBC Capital Markets. "This is just a small offset to those factors."
