Currencies and Metals Respond to Tariffs (03.27.2025)

The Japanese yen strengthened toward 150 as Trump’s auto tariffs and BOJ’s hawkish tone raised volatility. Gold approached $3,030 with investors eyeing the PCE report for Fed signals. GBP/USD slipped below $1.29 after the UK downgraded growth forecasts and revised inflation estimates. Silver rallied to $33.70, supported by risk aversion following the U.S. tariff announcement.

EUR/USD Bounces Back, Facing Resistance

EUR/USD rebounded from a three-week low near the 1.0735–1.0730 zone during Thursday’s Asian session, breaking a six-day losing streak as it climbed toward 1.0780. The recovery was driven by renewed selling pressure on the US Dollar. 

However, the euro's upside may be limited as the EU threatens retaliatory tariffs on US goods, raising fears of a trade conflict. Risk-off sentiment and weaker equity markets could also support the safe-haven USD, capping further gains. 

Key resistance is at 1.0850, followed by 1.0960 and 1.1000. Support lies at 1.0740, then 1.0650 and 1.0600.

Yen Recovers as BOJ Comments Drive Volatility

The Japanese yen strengthened toward 150 per dollar on Thursday, recovering from earlier losses as the US dollar weakened after Trump announced a 25% tariff on car imports and confirmed that upcoming reciprocal tariffs would remain in place throughout his second term. These comments raised fears of retaliation and economic fallout, increasing market volatility. 

At home, BOJ Governor Kazuo Ueda said rate hikes will continue if forecasts hold steady, noting strong growth and rising wages. Investors now await Friday’s BOJ Summary of Opinions and Tokyo inflation data for more policy clues. 

Key resistance is at 151.70, with further levels at 152.70 and 154.00. Support stands at 147.00, followed by 145.80 and 143.00.

Gold Nears Record Highs on Trade Tariffs

Gold climbed toward $3,030 per ounce after the U.S. announced 25% auto tariffs. Trump confirmed the new duties on imported vehicles, light trucks, and select parts, raising fears of global retaliation and economic fallout.

The Fed kept its forecast for two rate cuts this year but struck a cautious tone. Minneapolis Fed President Kashkari noted inflation progress but echoed Powell’s stance that cuts aren’t imminent. Markets now turn to Friday’s PCE report for further policy clues.

Key resistance is at $3,040, with further levels at $3,057 and $3,100. Support stands at $3,000, followed by $2,988 and $2,945.

Pound Dips Below $1.29 on Growth Forecasts

The British pound fell below $1.29, its lowest level in nearly two weeks, after February inflation data underperformed and the Spring Statement revealed downgraded growth forecasts. Finance Minister Rachel Reeves said inflation is now projected to average 3.2% in 2025, up from the previous 2.6%, while economic growth for 2025 was revised down to 1% from 2%.

Public sector net borrowing is expected to drop from £137.3 billion (4.8% of GDP) this year to £74.0 billion (2.1%) by 2029-30, though 2025-26 borrowing will be £12.1 billion higher than earlier estimates. The government plans to offset this with welfare reforms, spending cuts, and minor tax changes. February inflation slowed to 2.8%, slightly below the 2.9% forecast, but in line with the BoE’s outlook.

If GBP/USD breaks above 1.3050, resistance levels are at 1.3100 and 1.3150. Support is at 1.2860, followed by 1.2800 and 1.2715.

Auto Tariffs Spark Risk Aversion for Silver

Silver (XAG/USD) rebounded near $33.70 per ounce during Thursday’s Asian session, recovering recent losses after the U.S. announced a 25% tariff on auto imports. The move, signed by President Trump and set to take effect on April 2, sparked concerns over global retaliation. Auto parts imports received a one-month exemption, but broader trade tensions fueled risk aversion, supporting silver prices.

If silver breaks above $33.80, resistance levels are at $34.05 and $34.85. Support stands at $33.10, followed by $32.50 and $32.15.