China and the United States have lowered tariffs by 115%, and a comprehensive trade war may have been avoided!

On Monday, May 12, the US dollar index saw radical buying at the beginning of the new week, ahead of the latest round of sudden surge in the past hour or so, the highly anticipated U.S.-China joint statement was held in Geneva, Switzerland on the weekend. The statement confirms that the United States will suspend tariffs on Chinese goods by 24 percentage points within the first 90 days.

The statement pointed out that the US promised to take the following measures before May 14, 2025. The US will modify the adjudication tariffs imposed on Chinese goods stipulated in Executive Order No. 14257 of April 2, 2025. Among them, 24% of the tariffs will be suspended within the initial 90 days, and the remaining 10% tariffs will be imposed on these goods in accordance with the provisions of the Executive Order; and cancel the additional tariffs on these goods under Executive Order No. 14259 of April 8, 2025 and Executive Order No. 14266 of April 9, 2025.

In addition, China will modify the adjudication tariffs imposed on US goods as stipulated in the 2025 No. 4 of the Tax avaforexcn.commission Announcement: Among them, 24% of the tariff will be suspended within the initial 90 days, while retaining the remaining 10% tariff on these goods, and canceling the additional tariffs on these goods according to the Tax avaforexcn.commission Announcement No. 5 and No. 6 of 2025; taking necessary measures to suspend or cancel non-tariff countermeasures against the United States from April 2, 2025.

The Ministry of avaforexcn.commerce also pointed out in its statement that after taking the above measures, the two sides will establish a mechanism to continue to negotiate on economic and trade relations. Chinese representatives are Vice Premier He Lifeng, while US representatives are Treasury Secretary Scott Becent and US Trade Representative Jamison Greer. NegotiableProceed in China, the United States, or a third country agreed upon by both sides. As needed, the two sides can conduct work-level consultations on relevant economic and trade issues.

Basic foreign exchange market trends:

Euro/USD fell sharply in the early trading of Monday, with trading prices close to 1.1100, the lowest level in nearly a month. The short-term technical outlook for the pair remains bearish as the US dollar (USD) appears to continue to strengthen.

After starting with a slight uptrend, the US dollar/JPY continued to rise, with trading prices around 148.00, the highest level in nearly a month.

GBP/USD was trading near a one-month low on Monday. The pound/dollar exchange rate fell sharply after the United States (US) and China agreed to lower tariffs imposed in April's trade war, which will take effect on Wednesday for 90 days.

Although the dollar strengthened again, the Australian dollar/dollar remained stable on Monday, with a slight increase in the day, maintaining above 0.6400.

The USD/Canadian continued its upward momentum for the fourth consecutive trading day, with trading around 1.3980 during the European session on Monday. The dollar index tracking the US dollar (USD) against a basket of six major currencies is also rising,

Bulk market fundamentals:

In the first half of the European session on Monday, gold prices fell to a week-and-a-half low of around $3,216, and it seems likely to fall further. The latest optimism about the U.S.-China trade deal still supports optimistic market sentiment and continues to severely drag down traditional safe-haven goods.

Analysis of major currency trends:

Euro: Euro/USD is intraday biased towards 55DEMA (currently 1.1053) or may be lower. But the downside space should be curbed by the 38.2% retracement level of 1.1039 from 1.0176 to 1.1572 to bring about a rebound. On the plus side, breaking through 1.1380 will indicate that the correction from 1.1572's short-term top has been avaforexcn.completed and brings a retest of 1.1572.

Pound: The intraday bias of pound/dollar remains neutral at present. As long as the top of 1.3442 is held in the short term, the risk will remain moderately downward. Below 1.3211 will aim at 55DEMA (now at 1.3058). However, a continued breakthrough of the 1.3433/42 resistance zone will confirm a larger uptrend recovery.

Yen: The intraday bias of the US dollar/yen remains moderately upward as it is rebounding from 139.87. The focus is 1The 38.2% retracement level from 58.86 to 139.87 was 147.12. Rejected by 147.12 will remain bearish in the near term. Breakthrough of 142.34 support will be tested again at 139.87. However, a continued breakthrough of 147.12 will indicate a recent reversal and aim at the 61.8% retracement level of 151.60.

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