Global Currencies React as Trump Escalates Trade War
The yen weakened following U.S. President Trump's announcement to impose 25% tariffs on goods from Japan and South Korea. Meanwhile, Australia's dollar surged after the central bank left interest rates unchanged, defying expectations of a cut. Markets remain uncertain amid ongoing trade negotiations and economic fluctuations.
The Japanese yen took a hit on Tuesday as U.S. President Donald Trump reaffirmed his intention to slap 25% tariffs on imports from Japan and South Korea, further stirring the pot in his volatile trade war. This announcement comes as the latest development in a series of unpredictably aggressive trade policies from Washington.
In contrast, the Australian dollar saw an upturn after Australia's central bank opted against a widely anticipated interest rate cut, maintaining the cash rate at 3.85%. The decision surprised financial markets and resulted in the Australian currency rising more than 1%.
Amid these shifts, Prime Minister Shigeru Ishiba emphasized continued efforts for diplomatic negotiations with the U.S., aiming to find a trade deal beneficial to both countries. Meanwhile, economic bodies like the European Union seem poised to secure exemptions from these new tariffs, potentially easing some of the global trade tensions.
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