An alarming calm was established in the world markets. Investors are expecting the resulting situation around the introduction of new duties in the US on imported metals.

Market participants continue to assess the prospects for trade wars between the US and metal suppliers, which include the EU and China. However, it is most likely that this economic conflict will be expanded to Canada and Mexico and, probably, to some other countries. After yesterday's statement by D. Trump that the introduction of new import duties will depend on the NAFTA negotiations, the markets somewhat calmed. Despite this, we do not rule out the worst option which is the beginning of trade wars.

"Duties on imports of steel and aluminum (for supplies from Canada and Mexico) will be lifted only if a new fair trade agreement is signed," Trump said. (DJ Newswires)

In response to Trump's initiative, the EU has already announced that they are ready to respond. It seems that we are waiting for difficult times ahead of us and high volatility in the financial markets. While the focus of the market will be these events, the US dollar will remain under pressure.

This week, the investors' attention will also be drawn to the publication of data on employment in the United States. A Friday report on non-farm employment in the US economy will influence the dollar rate. It is expected that in January, the US economy will have to get 205,000 new jobs. If the figures are confirmed, this will be a strong reason for the Fed to activate the process of raising interest rates, which will be the basis for a local appreciation of the dollar despite the excitement around the likely introduction of new customs duties.

In addition, the market also awaits decisive measures from the ECB and the Bank of Japan in stopping incentive measures and announcing a change in monetary rates. However, as it seems to us, the situation here remains uneasy. Today, in his comments, the head of the Central Bank of Japan, H. Kuroda, made it clear that the bank will do everything in order to bring inflation closer to the target level of 2.0%. While he said that the topic of exit from incentive measures in the bank is being discussed, it's just what they will be. It's not clear yet. In summary, we note that the speech of the head was very cautious and had a slight negative impact on the yen.

Forecast of the day:

The EURUSD pair is trading at a strong resistance level of 1.2360. Its growth is caused by concerns related to the new tax initiatives of D. Trump. However, the price may adjust today to 1.2275 if the data from ADP proves to be strong.

The USDCAD pair is located above the level of 1.2955. It is supported by the risk of changing customs duties after negotiations between the US and NAFTA. Against this backdrop, the pair could continue to rise to 13060 if it holds above 1.2955.