The Australian dollar (AUD) held steady against the US dollar (USD) on Thursday (23/1), as market concerns eased following news that China-specific tariffs proposed under US President Donald Trump's revised plan were much smaller than previously expected. The development helped calm investor nerves, especially given the strong trade ties between China and Australia, which make the Australian market sensitive to changes in China's economic landscape.
President Trump announced plans to impose 10% tariffs on Chinese imports from February 1, citing concerns over fentanyl shipments from China to Mexico and Canada, according to Reuters. In response, Chinese Vice Premier Ding Xuexiang warned on Tuesday of the potential impact of a trade war, saying that there are "no winners" in such a conflict. His remarks came as China braced for possible tariffs under the Trump administration, as reported by CNBC.
Chinese authorities on Thursday introduced several measures to stabilize its stock market, including allowing pension funds to increase investments in domestic equities. A pilot scheme allowing insurers to buy equity will be launched in the first half of 2025, with an initial scale of at least 100 billion yuan. Meanwhile, the People's Bank of China (PBOC) said it "will expand the scope and scale of liquidity tools to fund equity purchases at an appropriate time." The S&P/ASX 200 index fell to near 8,400 on Thursday, driven mainly by a decline in mining stocks as weaker commodity prices weighed on the sector. The decline in Australian equities came despite strong gains on Wall Street. Investors remained cautious as they assessed the implications of President Trump's policy shift. (AL)
Source: FXstreet
