Gold retakes $5,200 as the US dollar weakens amid trade uncertainty and Iran strains
Gold rose for a fourth straight day on Monday and climbed back above $5,200 late in North American trading. XAU/USD was up nearly 2%. Prices touched a four-week high of $5,219 as the US Dollar weakened.
The US Supreme Court ruled against tariffs imposed under the International Emergency Economic Powers Act (IEEPA). After the ruling, Donald Trump announced 10% global tariffs, then raised them to 15% under Section 122. These Section 122 tariffs expire 150 days after they take effect.
GBP/JPY slips, stays in the 208.00–209.25 range as traders watch for a possible support break near 207.75
GBP/JPY slipped 0.22% on Monday and stayed in the 208.00–209.25 range. At the time of writing, it was trading around 208.57 after topping out at 209.23. Traders are watching support near 207.75.
Price is consolidating near the lower edge of an ascending channel. A rising support trendline and the 100-day SMA near 207.60 have limited losses so far, while a bearish flag pattern is forming.
Bearish Momentum Building
The RSI is below neutral and still falling. This points to building selling pressure. If the pair breaks below 208.00, the next support sits near 207.50. Below that, traders will watch 205.32 and the 200-day SMA at 202.60. On the upside, resistance is seen around 209.50 and 210.00. Additional resistance comes in near the 20- and 50-day SMAs at 210.73/210.98, with 213.82 as a higher target. A bearish flag is forming on the GBP/JPY chart. This suggests the current sideways move could be a pause before another leg lower. For derivative traders, that may mean considering downside hedges or selective short exposure. The pair is currently trading near 208.57 in a tight range.Key Levels To Watch
The technical setup is reinforced by economic surprises from early February 2026. UK inflation cooled unexpectedly to 2.5%, increasing expectations that the Bank of England may pause rate hikes. Meanwhile, Bank of Japan officials have sounded more confident about policy normalization, which has supported the yen. These diverging central-bank signals strengthen the bearish view. The 208.00 level is key. A clear break below it could trigger follow-through selling toward 207.50. That makes put options with strikes at or below 207.75 a potential approach for the coming weeks. A decisive move under this zone would put 205.32 in focus. It’s also worth recalling the sharp selloff in the second half of 2025. When risk sentiment deteriorated, the pair dropped more than 10 figures in a single quarter. That history suggests that a break of support near 207.60 could turn into a fast move. It also supports waiting for a confirmed breakdown before committing to a large position. If buyers push above 209.50, the bearish flag would be invalidated. That could force shorts to cover and trigger a squeeze. In that case, call option traders may look toward the 210.00 to 210.75 area. A sustained move above 211.00 would be needed to confirm a new bullish trend. Create your live VT Markets account and start trading now.Commerzbank says Malaysia’s January exports rose 19.6% year on year, boosting the ringgit, led by electronics, with growth moderating in 2026
Malaysia’s exports rose 19.6% year on year in January. This beat the Bloomberg consensus of 14.6% and improved from 10.2% in December. It was the strongest result since September 2022. Growth came mainly from high-value manufactured goods, including electronics and optical equipment.
Authorities expect export growth to slow in the coming months, but to stay positive in 2026. The Malaysia External Trade Development Corporation linked the strong results to exporters’ resilience and competitiveness.
Political tensions have increased inside the governing coalition. The Democratic Action Party, the largest party in the ruling bloc, is considering moving its cabinet ministers to the backbenches. This comes as support for Prime Minister Anwar Ibrahim has weakened and reforms have progressed slowly.
In foreign exchange markets, USD/MYR fell 0.2% to 3.90 last Friday and declined 0.1% over the week. Year to date, the Malaysian ringgit is up 4.0% against the US dollar.
Foreign portfolio flows have turned positive on a net basis. Net foreign portfolio inflows totalled USD355mn this year, compared with a USD885mn outflow over the same period last year.
We are seeing a strong start to 2026. January export growth of 19.6% was the best since late 2022. This strength is supported by the global technology upswing that began in 2025, which is still lifting demand for Malaysian electronics. The ringgit has gained 4% against the dollar this year, helped by USD355 million in net foreign inflows.
However, political uncertainty in the governing coalition is rising. Any sign of instability could quickly reverse the portfolio inflows seen so far. The market volatility around the 2018 general election shows how quickly foreign capital can leave on political headlines.
Over the next few weeks, this mix of strong data and higher political risk suggests that buying volatility may be sensible. With economic data strong, it may be risky to outright short the ringgit. But ignoring political risk also looks unwise. Options could help hedge long-MYR exposure or position for a sharp move in USD/MYR, possibly above 4.00.
Bank Negara Malaysia’s steady stance on the Overnight Policy Rate helps for now. It has held the rate at 3.00% since mid-2023. The 10-year Malaysian Government Securities yield, near 3.85%, also looks attractive versus the US 10-year Treasury. This yield gap can support some foreign investment, but it may not be enough to stop outflows if political risks rise further.
Deepali Bhargava says India benefits from the US tariff reset, easing burdens and strengthening ongoing trade negotiations
India has gained from recent changes to US tariffs, including the removal of higher IEEPA surcharges. This lowers India’s effective tariff burden even further after earlier cuts.
The change comes as India and the US continue talks on an interim trade deal. A joint statement earlier this month referenced an interim deal, but the detailed terms are still being negotiated.
US India Tariff Relief
President Trump had already reduced the tariff on India from 50% to 18%. Removing the IEEPA surcharges provides additional relief on top of that cut. A Supreme Court ruling is connected to the removal of the IEEPA tariff threat. With IEEPA no longer part of the picture, India has more room to revisit parts of the interim agreement during negotiations. This shift also eases pressure on sectors that could have faced punitive IEEPA action. Trade talks between India and the US are still ongoing. Looking back at events around 2025, the removal of IEEPA tariffs was a major turning point in US-India trade. This de-escalation helped create the stability seen today and reduced the headline risk that previously moved markets sharply. That cooperative base has supported steady growth in bilateral trade, which government reports now project will exceed $250 billion this year.Implications For Markets And Traders
For derivatives traders, this suggests implied volatility linked to US trade policy may stay low. India VIX has remained calm in the 12–14 range for months, far below the spikes above 20 seen during intense trade negotiations in past years. As a result, strategies that benefit from stable markets—such as selling out-of-the-money options on the Nifty 50 index—look more attractive than buying protection against sudden tariff shocks. Sectors that were once exposed, such as steel and auto components, have improved as trade conditions normalized. The Nifty Auto index’s 8% year-to-date gain reflects this confidence. This may support bullish strategies with defined risk, such as bull call spreads. The risk of sudden punitive action is now at its lowest level in nearly a decade, which reduces the chance of sharp, unexpected drops in these industries. Stability has also helped anchor the USD/INR pair, which has been less volatile than in prior years. The Reserve Bank of India’s latest bulletin noted lower rupee volatility against the dollar, tied to more predictable trade flows. This environment can support range-bound currency strategies, such as short iron condors, in the coming weeks. Still, traders should watch the preliminary talks for the new Comprehensive Strategic Economic Partnership, scheduled for next month. The overall backdrop is positive, but unexpected friction could bring uncertainty back into markets. Buying low-cost, long-dated Nifty 50 puts can be an effective hedge if negotiations produce surprises. Create your live VT Markets account and start trading now.Bob Savage at BNY sees North Asian currencies supported by easier policy, fiscal growth, and AI exports
BNY said Asian foreign exchange is getting support from easy monetary policy, higher government spending, and strong exports tied to AI and semiconductors. It is positive on CNY, TWD, KRW, and MYR. It is neutral on SGD and IDR. It is cautious on INR, THB, and PHP.
It said crude prices that stay high for a long time could hurt net oil importers by worsening their trade balance, especially THB, KRW, INR, and JPY. It added that, for now, this is unlikely to change the broader inflation trend.
Asian Fx Outlook Remains Supportive
For Japan, BNY said February Tokyo CPI, along with January PPI, retail sales, and industrial production, will test how lasting price pressures are. It said JPY volatility may remain high. It will also watch weekly portfolio flow data after strong recent foreign inflows into Japanese equities and bonds. For India, it said Q4 GDP and January fiscal deficit data will affect INR performance and expectations for bond supply. The article said it was created with help from an Artificial Intelligence tool and reviewed by an editor. The overall outlook for Asian currencies remains supportive going into March. Easy monetary policy and strong export growth, especially in AI and semiconductors, continue to provide a positive backdrop. January 2026 data supported this view, with regional semiconductor exports up more than 12% year over year. We remain positive on the Chinese Yuan, Taiwan Dollar, South Korean Won, and Malaysian Ringgit. Derivative traders may consider positioning for further gains. For example, call options can capture potential upside while limiting risk. This view also reflects the momentum these currencies showed against the dollar in Q4 2025.Crude Oil Remains A Key Risk
We remain cautious on the Indian Rupee, Thai Baht, and Philippine Peso. With WTI crude holding above $85 a barrel this month, these net oil importers face added pressure. Traders may consider protective puts, or stay on the sidelines for now. Upcoming data in Japan may keep yen volatility high and create trading opportunities. With February Tokyo CPI at 2.9%, slightly above expectations, uncertainty about the Bank of Japan’s next move remains elevated. Traders could consider strategies such as straddles to benefit from expected swings in USD/JPY, regardless of direction. We are watching India’s Q4 GDP data closely, especially after strong growth through much of 2025. The GDP result, together with the January fiscal deficit number, will affect INR moves and bond market expectations. Traders should be ready for a possible jump in volatility around these releases later this week. Crude oil prices remain a key risk. They have risen more than 5% since the start of February, adding pressure on net importers like Thailand, South Korea, India, and Japan. For investors holding long positions in currencies such as KRW, hedging with options on oil futures may help reduce risk. Create your live VT Markets account and start trading now.USD/CAD holds near 1.3665 amid a weaker US dollar and cheaper oil, staying below 1.3700
USD/CAD traded near 1.3665 on Monday and was little changed on the day. The pair is trying to stabilize after a late pullback from a monthly high, but it remains below 1.3700.
The US Dollar started the week on a weaker note after hitting its highest level since January. President Donald Trump announced a 15% global tariff, which has pressured the Dollar.
Us Data And Fed Signals
US data were mixed. Factory Orders fell 0.7% month-on-month in December, coming in below forecasts. Federal Reserve Governor Christopher Waller supported a 25-basis-point rate cut, citing a gradual softening in the labour market. Oil prices fell after recently reaching a more than six-month high. Worries about the impact of trade wars and softer fuel demand weighed on crude. Lower oil prices can hurt the Canadian Dollar because Canada is a major oil exporter. Reports also said Washington may consider limited strikes against Iran if nuclear talks fail. Any rise in tensions could increase volatility in oil prices and, in turn, the Canadian Dollar. This is similar to early 2025, when USD/CAD struggled below 1.3700. The market was stuck between a US Dollar weakened by tariff threats and a Canadian Dollar pulled down by falling oil prices. That push and pull kept the pair range-bound.How The Backdrop Has Shifted
Today’s picture looks very different after the Fed’s three quarter-point rate cuts in 2025. US inflation is now steady around 2.9%, and January job growth was a modest 185,000. With markets expecting the Fed to keep rates unchanged, pressure on the US Dollar has eased. This is a clear shift from the more dovish tone seen at this time last year from officials such as Governor Waller. At the same time, crude oil has strengthened. WTI is now holding above $82 per barrel, up from below $75 during the 2025 trade fears. This support comes mainly from recovering global demand and disciplined OPEC+ production. Stronger oil prices improve Canada’s terms of trade, giving the Canadian Dollar support that was missing last year. For derivative traders, this shift may favour different strategies than the range-bound setups used in 2025. With the Canadian Dollar on firmer fundamentals and the US Dollar’s yield advantage narrowing, CAD call options or USD/CAD put options with three-to-six-month expiries may look appealing. These trades can position for a possible move toward the 1.3350 support level last tested in late 2024. Because last year’s Iran-related tensions did not turn into a major conflict, implied volatility in energy markets has eased. That can make option premiums cheaper than they were during the uncertainty of 2025. Traders may use this lower-cost backdrop to build positions that could benefit from a gradual decline in USD/CAD. Create your live VT Markets account and start trading now.Trade fears return after Trump’s tariff stance as AUD/USD dips and the Australian dollar weakens against the US dollar
AUD/USD slipped on Monday. The pair traded near 0.7051 after briefly moving above 0.7100 earlier in the day. The Australian Dollar struggled to gain even as the US Dollar weakened.
On Friday, the US Supreme Court ruled that President Donald Trump’s use of the International Emergency Economic Powers Act to impose broad tariffs was unlawful. President Trump then announced a 15% global tariff under Section 122 of the Trade Act of 1974.
Market Reaction And Dollar Dynamics
The US Dollar initially fell, then stabilized as markets adjusted to the new tariff framework. The US Dollar Index held around 97.67 after hitting an intraday low near 97.35. Lower expectations for an imminent Federal Reserve rate cut also supported the US Dollar. Markets still price in about 50 basis points of cuts by year-end. Fourth-quarter GDP growth is described as sluggish, while PCE inflation remains firm. In Australia, traders see a chance of another rate rise in March after stronger data and tighter policy signals. Inflation data due Tuesday is expected to show headline CPI at 3.7% year-on-year in January, down from 3.8% in December. Trimmed Mean CPI is expected to hold steady at 3.3% year-on-year. We remember how the surprise 15% global tariff introduced in early 2025 drove major trade tensions. That policy weighed on risk-sensitive currencies through last year. As a result, AUD/USD fell steadily from above 0.7000 to a trading range near 0.6550.Shifting Policy Outlook And Trading Implications
The US Dollar outlook has changed a lot since the 2025 policy debates. The Federal Reserve kept rates steady for much of last year to fight tariff-driven inflation, but growth has since weakened. January’s Non-Farm Payrolls report showed only 85,000 new jobs. This has increased expectations for rate cuts later this year. In Australia, the hawkish mood from early 2025 has faded. The global trade slowdown has cooled the local economy. The latest data shows Q4 2025 headline CPI falling to 2.9%. This puts the Reserve Bank of Australia closer to the Federal Reserve, with markets now expecting easing from both. For derivative traders, the main story is no longer the clear policy split seen in 2025. Instead, markets are dealing with a broad global slowdown. The key question is which central bank cuts first, and how quickly. In this setting, buying volatility using straddles or strangles may be a sensible way to prepare for sharp moves in either direction. Create your live VT Markets account and start trading now.ABN AMRO economists say Supreme Court ruling annulling IEEPA tariffs cuts US duties, though they remain historically high
The US Supreme Court ruled 6–3 that the International Emergency Economic Powers Act (IEEPA) does not let a President impose tariffs. The Court left it to lower courts to decide whether more than $160 billion in paid tariffs must be refunded.
The decision slightly reduces overall US tariff levels, but tariffs are still historically high. The Trump administration moved quickly to restore tariffs using other legal tools.
Tariff Refunds And Fiscal Effects
If courts order refunds, they would raise this year’s deficit. Even so, the long-term debt outlook is not expected to change much. Forecasts already assumed tariffs would fall this year—and that drop has now happened. Inflation effects should be small. Even if companies get refunds, they are unlikely to pass that money on to consumers. Section 122 could be used again, but it only lasts 150 days and could face legal challenges. Those cases likely would not be resolved before the 150 days end. Section 122 was originally meant to deal with international payment problems under fixed exchange rates. The administration is also expected to use Section 232 and Section 301 to rebuild tariffs after new investigations. These tools cannot recreate broad, universal tariffs, but over time they could rebuild something close to the previous package.Trading Implications And Sector Volatility
The Supreme Court’s decision to limit presidential tariff powers has changed the trading environment. It moves markets away from broad, predictable tariffs and toward more targeted and uncertain actions. The administration is now rebuilding tariffs step by step, which creates uneven risks across sectors. In this setting, we favor trading volatility rather than making simple, market-wide directional bets. Traders should watch sectors often targeted under Sections 232 and 301, such as steel, aluminum, and Chinese technology imports. As new investigations begin, implied volatility could rise in ETFs tied to these areas, including the industrial sector SPDR (XLI). That may make volatility strategies—such as buying straddles or strangles on key industrial and tech names—more attractive as uncertainty increases. We do not view this as a major disinflation shock that would change Federal Reserve policy. The latest Consumer Price Index showed a 0.4% monthly increase in January 2026, keeping annual inflation above 3%. Any refunds paid to businesses are also unlikely to reach consumers. For that reason, options trades that rely on aggressive Fed rate cuts because of this tariff news look poorly positioned. The possibility that more than $160 billion in tariff refunds could be paid out this year creates a clear fiscal risk. It could widen the projected deficit, which the CBO already put at more than $1.7 trillion for fiscal year 2026. That could be a headwind for US Treasuries. It may also add volatility in currency markets, especially the US dollar versus the Chinese yuan. Section 122 would allow broad tariffs for a limited 150-day window while longer-term measures are investigated. Because legal challenges are unlikely to conclude before it expires, traders should expect short-term market disruptions when Section 122 is used. This creates a defined period when hedging currency exposure or certain commodity futures may become more important. Create your live VT Markets account and start trading now.Tariff uncertainty hit markets, pushing the DJIA below 49,000 and down 700 as the S&P 500 and Nasdaq fell
US stocks fell as tariff uncertainty increased. The Dow dropped about 700 points (1.45%). The S&P 500 fell 0.6%, and the Nasdaq lost 0.7%.
The US raised a Section 122 global tariff from 10% to 15% after the Supreme Court struck down tariffs under IEEPA. The 15% tariff can last up to 150 days unless Congress extends it. The US also plans new Section 301 probes.
Market Volatility And Tariff Risk
Novo Nordisk shares fell as much as 16% after CagriSema underperformed in the REDEFINE 4 trial versus Eli Lilly’s tirzepatide. After 84 weeks, weight loss was 20.2% for CagriSema versus 23.6% for tirzepatide. Eli Lilly rose about 3%. Oracle and Palantir fell about 4%. American Express dropped roughly 5–7%. The iShares Software ETF is down about 20% year-to-date. Nvidia rose about 1.7%. Earnings expectations are $1.53 per share on $65.7 billion in revenue. Gilead will buy Arcellx for $7.8 billion. Arcellx jumped nearly 80% to about $115 per share, plus a $5 contingent value right (CVR). Gold rose more than 1% to about $5,168 per ounce, and silver climbed toward $88. Bitcoin fell to about $65,000. Domino’s reported $1.54 billion in revenue, with 3.7% US same-store sales, and shares rose about 5%. New global tariffs are raising uncertainty and driving a jump in market fear. The CBOE Volatility Index (VIX) is up more than 20% this week and is trading above 22. That level is similar to the trade-war tension seen in 2019. To help limit downside risk, we should consider SPY puts or VIX call options in case trading partners respond with their own measures. Novo Nordisk’s sharp 16% drop also highlights a clear split versus Eli Lilly, which now looks like the stronger leader in weight loss. Implied volatility on Novo options has climbed above 60%, which points to more large moves ahead. One way to use this gap is a pairs trade: buy puts on NVO and calls on LLY, aiming to profit if the performance difference keeps widening.Software Rotation And Earnings Setup
There is a major shift away from legacy software. Tech funds reported more than $5 billion in outflows from the sector last month alone. The decline in names like Oracle and American Express may have further to go, which makes puts on the IGV software ETF a useful hedge. For Nvidia’s earnings on Wednesday, a straddle can help position for a big move in either direction, since it focuses on volatility rather than direction. Gilead’s Arcellx deal is a long-term move into cell therapy, not a short-term trade. The announcement is now largely priced into Arcellx. However, the small dip in Gilead could offer a lower-cost entry for long-dated call options. The main catalyst is the FDA decision on anito-cel in December, so options expiring in early 2027 may fit the timeline. The move to safety is clear, with gold pushing above the key $5,100 level. As long as tariff tension stays high, we should consider adding exposure through calls on the GLD and SLV ETFs. Bitcoin is still trading like a risk asset and is down nearly 15% year-to-date. Puts on crypto-related ETFs can help hedge this risk-off setup. Create your live VT Markets account and start trading now.NZD/USD falls to around 0.5965 despite strong New Zealand retail sales and a dovish RBNZ, down 0.20%
NZD/USD traded near 0.5965 on Monday, down 0.20%, even though New Zealand consumption data was stronger.
Fourth-quarter Retail Sales rose 0.9% quarter-on-quarter, beating the 0.6% forecast, but slowing from the prior quarter’s 1.9%. Retail Sales excluding Autos increased 1.5%, after a previous 1.2% rise.
