empty
10.04.2025 09:56 AM
Trump Maneuvers in Trade War With China (Potential for Continued Recovery in #SPX and AUD/USD)

The U.S. President continues maneuvering actively, engaging in geopolitics, economics, and global financial markets.

Investors are asking: What happened on Wednesday? Why did the White House suddenly announce a truce or a 90-day pause in the tariff war, even though it had previously rejected one?

Metaphorically speaking, any Formula 1 driver would envy Trump's ability to make a sharp 180-degree turn like an acrobat—triggering a rally in U.S. stock indices that marked some of the strongest gains since the turn of the century. Equity markets in other countries also rushed to keep pace. Observing the situation, one gets the impression that the whole tariff narrative was orchestrated as a cover for the true objective: to intimidate China and inflict economic damage. Judging by Trump's words, half the world has already bowed to Washington, pleading for leniency.

However, Beijing did not flinch and responded with mirror tariffs. On the one hand, this was expected—rumors of a 90-day pause had been circulating. On the other hand, the official announcement made it a reality. Trump signaled to the countries that submitted to him that he would graciously lower tariffs to 10% during a 90-day negotiation period—but not for China.

Now, the markets are again suspended in a state of uncertainty. They don't know what the final outcome will be. From my perspective, this entire show was designed to remind the world of America's role and highlight China as its main economic rival. All the recent tariff rhetoric seems to be part of a cover operation. However, with Beijing holding firm, Trump must come up with something new to break China's resistance. A real trade war with China threatens to trigger a severe economic crisis in the U.S.—and the president knows it.

And the markets? They've been left in limbo again as the outcome of the U.S.-China standoff remains unclear. I believe Washington and Beijing will eventually have to reach an agreement. Juggling tariff rates won't lead to anything good. As I've previously mentioned, gradual de-escalation and a compromise between the two sides would be a positive development for markets, likely triggering a continued rally in equity indices and a recovery in commodity prices. The U.S. dollar may weaken if expectations grow that the Fed could cut interest rates this year due to slowing inflation—or even a downward price correction. Today's U.S. inflation data may support that view.

If the inflation report shows a decline, it would provide an additional boost for demand in equities, increase Treasury yields, and simultaneously weaken the U.S. dollar.

Overall, the current situation indicates a high probability of continued momentum in risk assets following yesterday's powerful rally and a continued decline in the dollar. Against this backdrop, interest in cryptocurrencies may also grow.

This image is no longer relevant

This image is no longer relevant

Forecast of the Day

#SPX

After yesterday's sharp rally, the S&P 500 futures CFD is consolidating below the 5500.00 level. If the inflation report confirms a drop in consumer prices, we could see a renewed surge toward 5682.45 and then 5787.50 after breaking above the 5500.00 resistance level. A potential entry point may be at 5519.92.

AUD/USD

The pair rose significantly amid yesterday's wave of optimism. Its upward movement may continue if U.S. consumer inflation shows signs of slowing. A breakout above the 0.6200 resistance level may push the pair toward 0.6280. A possible entry point lies at 0.6207.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Overview – June 13: The Court Won't Stop Donald Trump!

The GBP/USD currency pair continued its upward movement on Thursday and nearly updated its three-year high. For most of the day, quotes hovered around the 1.36 level

Paolo Greco 03:41 2025-06-13 UTC+2

EUR/USD Overview – June 13: America's Economy Gets Lucky

The EUR/USD currency pair continued its strong upward movement throughout Thursday. Is anyone still puzzled as to why the U.S. dollar keeps falling? From our point of view, the reasons

Paolo Greco 03:41 2025-06-13 UTC+2

Trump Sends Out "Letters of Happiness"

It has been less than two weeks since Donald Trump raised import tariffs on steel and aluminum for all countries except the UK. While negotiations with the UK were deemed

Chin Zhao 00:21 2025-06-13 UTC+2

GBP/USD. A Weak Pound Stronger Than a Weak Greenback

Following weak UK labor market data, equally soft figures on British economic growth were released on Thursday. Almost all components of the report came out in the "red zone," increasing

Irina Manzenko 00:20 2025-06-13 UTC+2

The Dollar Flees the Battlefield

The old becomes new again. The word "recession" again trended in the Forex and other financial markets. May's U.S. Consumer Price Index (CPI) fell short of Bloomberg analysts' forecasts. Following

Marek Petkovich 00:20 2025-06-13 UTC+2

Market sells facts

Markets rise on rumors and fall on facts. For a long time, the S&P 500 had been rising due to investors' confidence in a US-China trade agreement. Once the deal

Marek Petkovich 16:53 2025-06-12 UTC+2

The Fed Is Right—It's Too Early to Cut Rates (I Expect a Decline in #SPX and an Increase in Gold Prices)

The fresh U.S. Consumer Price Index (CPI) data released on Wednesday, although below the consensus forecast, confirmed the persistence of inflationary pressure. This fully justifies the Federal Reserve's reluctance

Pati Gani 10:37 2025-06-12 UTC+2

Trump Threatens Tariffs Again – Markets React

President Donald Trump announced yesterday that he intends to send letters to trade partners within the next one to two weeks outlining unilateral tariff rates. This is ahead

Jakub Novak 09:10 2025-06-12 UTC+2

What to Pay Attention to on June 12? A Breakdown of Fundamental Events for Beginners

A significant number of macroeconomic reports are set for Thursday, but only a few are truly important. The key reports to highlight are the GDP and industrial production data from

Paolo Greco 05:52 2025-06-12 UTC+2

GBP/USD Overview – June 12: Protests Against Trump and Fed Policy

The GBP/USD currency pair continued to trade very calmly on Wednesday. Naturally, when U.S. inflation data was released, we saw a brief burst of market reaction—though it didn't last long

Paolo Greco 04:07 2025-06-12 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.