Gold at record high, dollar is firm and Hong Kong shares rise to a four-month peak ahead of Fed chair’s testimony
11 February 2025 - 07:45
byChuck Mikolajczak and Tom Westbrook
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An oil pump jack is seen in the Loco Hills region, New Mexico, US. File photo: LIZ HAMPTON/REUTERS
New York/Singapore — Gold hit a record high, the dollar was firm and Hong Kong shares advanced to a four-month peak on Tuesday as investors navigated shifts in US trade policy and waited to hear from Federal Reserve chair Jerome Powell on tariffs and inflation.
Oil prices clung to a sharp overnight bounce. Hong Kong’s Hang Seng has rallied more than 12% in a month as Donald Trump’s administration has threatened, then suspended, blanket tariffs on Canada and Mexico — seemingly confirming investor assumptions that everything is negotiable.
Trump on Monday lifted tariffs on steel and aluminium imports to 25%, pushing up share prices of US steelmakers. A tariff of 10% on Chinese imports took effect earlier in the month and retaliatory Chinese duties on US energy and some goods came into effect on Monday.
There has been little sign of progress towards a trade arrangement between Beijing and Washington, but expectations for a breakthrough remain high.
“He’s a business person by nature, so there are deals to be done at some point,” said Prashant Bhayani, chief investment officer in Asia at BNP Paribas Wealth Management. “So that’s why the market’s been measured.”
In currency trade the Chinese yuan has weakened past the 7.3 to the dollar level and traded at 7.3071 on Tuesday morning. The Australian dollar was steady at $0.6273, with Trump saying he would give “great consideration” to Australia’s request for exemption on steel tariffs.
Gold hit a record peak just above $2.935/oz.
“This is still very early days,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. “The market’s just sort of chopping around rather than really directional right now.”
Against the Japanese yen, the dollar was steady at ¥152.01 and it sat at $1.03 to the euro. The Canadian dollar and Mexican peso had slipped as those countries bear the brunt of Trump’s metal tariffs.
On Wall Street, US stocks closed higher, led by gains in the energy and tech sectors. The S&P 500 materials index rose 0.5%, buoyed by steel companies such as Nucor, up 5.6%, and Steel Dynamics, which advanced 4.9%.
Shares of McDonald’s climbed 4.8% after the fast-food restaurant reported quarterly results.
“Investors are basically saying, ‘Hey, let’s go back into the areas that worked.’ And one reason that investors are optimistic, in my opinion, is because of earnings,” said Sam Stovall, chief investment strategist at CFRA Research.
Europe’s continent-wide Stoxx 600 index rose 0.58% to close at a record high of 545.92 on Monday, led by a 1.5% climb in the oil and gas sector, where energy prices were spiking.
Dutch and British wholesale gas prices rose to around two-year highs on Monday as colder weather increased demand for gas and storage withdrawals rose.
Powell is due to speak on Tuesday for the semi-annual monetary policy testimony before the Senate banking, housing and urban affairs committee. His comments on tariffs and inflation are likely to be closely monitored.
Markets are largely expecting the Fed to hold rates steady at its March meeting, with expectations for a cut of at least 25 basis points not climbing above 50% until June, according to CME’s FedWatch Tool.
Benchmark 10-year treasury yields closed at 4.495% and were untraded in the Asia session owing to a public holiday in Japan.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Traders mull Donald Trump’s latest tariff threat
Gold at record high, dollar is firm and Hong Kong shares rise to a four-month peak ahead of Fed chair’s testimony
New York/Singapore — Gold hit a record high, the dollar was firm and Hong Kong shares advanced to a four-month peak on Tuesday as investors navigated shifts in US trade policy and waited to hear from Federal Reserve chair Jerome Powell on tariffs and inflation.
Oil prices clung to a sharp overnight bounce. Hong Kong’s Hang Seng has rallied more than 12% in a month as Donald Trump’s administration has threatened, then suspended, blanket tariffs on Canada and Mexico — seemingly confirming investor assumptions that everything is negotiable.
Trump on Monday lifted tariffs on steel and aluminium imports to 25%, pushing up share prices of US steelmakers. A tariff of 10% on Chinese imports took effect earlier in the month and retaliatory Chinese duties on US energy and some goods came into effect on Monday.
There has been little sign of progress towards a trade arrangement between Beijing and Washington, but expectations for a breakthrough remain high.
“He’s a business person by nature, so there are deals to be done at some point,” said Prashant Bhayani, chief investment officer in Asia at BNP Paribas Wealth Management. “So that’s why the market’s been measured.”
In currency trade the Chinese yuan has weakened past the 7.3 to the dollar level and traded at 7.3071 on Tuesday morning. The Australian dollar was steady at $0.6273, with Trump saying he would give “great consideration” to Australia’s request for exemption on steel tariffs.
Gold hit a record peak just above $2.935/oz.
“This is still very early days,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. “The market’s just sort of chopping around rather than really directional right now.”
Against the Japanese yen, the dollar was steady at ¥152.01 and it sat at $1.03 to the euro. The Canadian dollar and Mexican peso had slipped as those countries bear the brunt of Trump’s metal tariffs.
On Wall Street, US stocks closed higher, led by gains in the energy and tech sectors. The S&P 500 materials index rose 0.5%, buoyed by steel companies such as Nucor, up 5.6%, and Steel Dynamics, which advanced 4.9%.
Shares of McDonald’s climbed 4.8% after the fast-food restaurant reported quarterly results.
“Investors are basically saying, ‘Hey, let’s go back into the areas that worked.’ And one reason that investors are optimistic, in my opinion, is because of earnings,” said Sam Stovall, chief investment strategist at CFRA Research.
Europe’s continent-wide Stoxx 600 index rose 0.58% to close at a record high of 545.92 on Monday, led by a 1.5% climb in the oil and gas sector, where energy prices were spiking.
Dutch and British wholesale gas prices rose to around two-year highs on Monday as colder weather increased demand for gas and storage withdrawals rose.
Powell is due to speak on Tuesday for the semi-annual monetary policy testimony before the Senate banking, housing and urban affairs committee. His comments on tariffs and inflation are likely to be closely monitored.
Markets are largely expecting the Fed to hold rates steady at its March meeting, with expectations for a cut of at least 25 basis points not climbing above 50% until June, according to CME’s FedWatch Tool.
Benchmark 10-year treasury yields closed at 4.495% and were untraded in the Asia session owing to a public holiday in Japan.
Reuters
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