President Trump’s new tariffs have triggered trade war fears, impacting nearly 60 countries, with China facing tariffs of up to 54% if the issue remains unresolved by April 9. This news, released after North American hours, sent JPY and Gold soaring while the US Dollar Index (DXY) fell to a six-month low. Despite strong US ADP Employment data, concerns about growth and tariff fears gave US Dollar bears control, boosting EURUSD and GBPUSD despite risk-off sentiment.
USDCAD hit a five-week low on a three-day losing streak, as Canada and Mexico are currently exempt from Trump tariffs due to the USMCA deal. Further, AUDUSD and NZDUSD struggled to attract buyers, impacted by China-related fears and their risk-barometer status.
Further, Crude Oil pulled back from a five-week high, dropping for a third consecutive day as rising inventories join concerns about OPEC+ supply increases and slowing Chinese demand to weigh on prices. Meanwhile, Bitcoin (BTCUSD) and Ethereum (ETHUSD) followed equities downward, posting losses amid the risk aversion triggered by Trump’s tariff announcements.
EURUSD sees its biggest daily jump in a month, reaching a two-week high as broad US Dollar selling combines with hawkish remarks from ECB’s Robert Holzmann. Despite looming 20% tariffs and recession fears from a potential trade war, the pair rallies. European Commission President Ursula von der Leyen is ready to counter US tariffs, while ECB President Lagarde remains optimistic ahead of the announcements.
GBPUSD rises to its highest level since mid-October 2024, while USDJPY drops the most in five months after Trump’s tariff announcements, triggering a US Dollar slump. The Pound benefits from the UK’s lower tariff range and good US relations, signaling a quick trade deal. Meanwhile, the Japanese Yen strengthens on its safe-haven status and hawkish concerns about the Bank of Japan (BoJ), despite Tokyo’s willingness to negotiate new trade terms with the US.
AUDUSD initially rose with the US Dollar’s slump but reversed gains due to concerns over Australia’s trade ties with China, which faces nearly 54% US tariffs. The Aussie’s risk-barometer status and a weaker trade surplus also dampened bullish momentum.
NZDUSD is on a three-day winning streak but lacks strong upside due to China-related fears. USDCAD dropped to a five-week low, despite weaker Crude Oil prices, as Canada remains exempt from Trump’s tariffs under the USMCA deal. However, rising US-Canada tensions and Trump’s threat to rescind USMCA could spark a rally in USDCAD, especially if a trade war develops, alongside softer oil prices.
Growing concerns over the US-led trade war testing the macro growth and global geopolitical tensions push investors toward safe-haven Gold, driving it to a new all-time high near $3,167, despite a recent pullback as the market consolidates.
Meanwhile, Crude Oil extends its three-day losing streak, hitting a weekly low due to rising US crude inventories, OPEC+ plans to increase output in April, and fears of a hit to China’s energy demand from the trade war. However, US-Iran tensions and a weaker USD test the oil bears.
Bitcoin (BTCUSD) and Ethereum (ETHUSD) are consolidating after their biggest daily drop in over a week, as the market stabilizes amid a softer US Dollar. The cryptocurrencies fell sharply the previous day, reflecting broad pessimism about US tariffs, despite industry reports being relatively neutral.
After a volatile start, driven by reactions to Trump’s tariffs, market volatility is expected to increase as Western traders return. Key data to watch include US Jobless Claims, trade balance, and ISM and S&P PMIs.
If global leaders continue to criticize Trump without productive talks, risk sentiment could worsen, boosting Gold and JPY. However, if US data supports Fed hawks, EURUSD and GBPUSD may pull back. Antipodeans could give back gains, Crude Oil may drop further, and cryptocurrencies and equities might drift lower in that case.
May the trading luck be with you!
