Foreign Exchange Online · Masakazu Sato’s Practical Trading Techniques: Techno & Macro Analysis Predicting the Future of the Big Three Currencies [Theme of this month | Sudden drop in foreign currency due to back-to-back tariff tweets! Trump President

I know Trump’s extreme tweets won’t stop. The market is being whipsawed by sudden, extreme, and fickle Trump tweets that quickly reverse prior statements. Now, “how to deal with Trump’s words and actions” is the most important issue in FX investing. The basics suggest that extreme tweets look like the right occasion to buy yen or sell dollar/yen currency pairs. The eye of the FX storm—the “Trump’s manual”—is being tested here.

※This article is a reprint and edited version of an article from FX攻略.com November 2019 issue. Please note that the market information written in the main text may differ from current market conditions.

Masakazu Sato Profile

Sato, Masakazu. After working at a Japanese bank, he joined French Paris Bank (now BNP Paribas Bank). He has held roles such as Interbank Chief Dealer, Head of Funding, Senior Manager, and others. Later, he became Senior Analyst at FX Online, which boasted the highest annual trading volume. He has been involved in the world of forex for over 20 years. He appears on Radio NIKKEI’s “Stock Market Live Commentary! Stock Channel,” Stock Voices’ “Market Wide—Foreign Exchange Information,” and regularly provides market information on Yahoo! Finance.

Dollar/Yen at Risk of Breaking 104 on Trump’s Tariff Activation Tweet Against China!

Triggered by Trump’s August 1 tweet that he would activate the fourth tranche of tariffs on China from September, all financial markets including currencies, stocks, and government bonds were hit by a storm. Later, fearing a sharp drop in U.S. stocks, the U.S. Treasury announced on December 15 that it would delay imposing tariffs on imported goods—such as smartphone devices and toys—that could hit U.S. holiday sales.

The markets were already full of risk factors: possible Chinese military action against Hong Kong’s pro-democracy movement, further depreciation risk for the yuan, heightened tensions with Iran in the Middle East, repeated missile launches by North Korea, Germany’s GDP contracting in Q2, and turmoil in emerging markets like Argentina. Amid all this, a series of Trump tweets have further inflamed the financial markets. So, in this article titled “Trump’s Manual,” we analyze his extreme and impulsive patterns of behavior and examine how to respond.