Markets Disrupted by Trump Tariffs as Euro and Gold Surge (04.04.2025)

Euro Surges Past $1.10 on U.S. Tariff Shock

The euro surged over 2%, breaking above $1.10 for the first time since October 2024, as the U.S. dollar weakened after Trump’s tariff announcement. The U.S. will impose a 10% tariff on all imports, with rates up to 20% on the EU.

EU chief von der Leyen warned of a “major blow” to the global economy and confirmed retaliation plans. With 20% of EU exports heading to the U.S., Germany is expected to be hit hardest.

Markets now price in a 90% chance of a 25bps ECB rate cut in April, with the deposit rate expected to fall to 1.82% by year-end, down from 2.5% currently.

Key resistance is at 1.1100, followed by 1.1150 and 1.1215. Support lies at 1.1000, then 1.0850 and 1.0730.

Yen Climbs on Risk-Off Mood Despite Mixed Japan Data

The yen traded near a six-month high of around 146 on Friday, after a 2% gain in the previous session, as Trump’s broad tariffs increased safe-haven demand. A 10% base tariff on all imports takes effect April 5, with higher rates on 60 countries—China (54%), EU (20%), Japan (24%), India (27%), and Vietnam (46%). Global growth fears and inflation concerns triggered a market sell-off, lifting the yen. Japan's data offered some support, with personal spending falling less than expected in February. The BoJ is still expected to raise rates this year, though trade and domestic uncertainties cloud the outlook.

Key resistance is at 147.00, with further levels at 151.70 and 152.70. Support stands at 145.80, followed by 143.00 and 141.80.

Gold Rises on Trade Fallout Fears

Gold held above $3,110 on Friday, heading for a fifth straight weekly gain after repeatedly hitting record highs, driven by risk aversion following Trump’s tariff rollout. The U.S. imposed a 10% base tariff on all imports, with higher rates for top trade partners, sparking global retaliation. Gold briefly dipped Thursday on profit-taking and news that precious metals were excluded from the tariff list. Still, strong safe-haven demand, Fed rate cut expectations, central bank buying, and rising ETF inflows supported gold. Investors now await the U.S. non-farm payrolls report for Fed policy signals.

Key resistance is at $3,150, followed by $3,200 and $3,250. Support stands at $3,085, then $3,055 and $3000.

Pound Rallies as Trump Tariffs Weaken Dollar

The British pound rose to $1.30, a six-month high, after a sharp drop in the U.S. dollar following Trump’s new reciprocal tariffs. The U.S. will apply a 10% tariff on all imports, including goods from the UK. The move sparked concerns over global economic stability, pushing investors toward safer assets. UK PM Starmer urged a calm response, saying the UK would focus on its own interests. Markets now expect the BoE to cut rates by 62bps by December, up from 54bps previously forecast on Wednesday.

If GBP/USD breaks above 1.3120, resistance levels are at 1.3150 and 1.3200. Support is at 1.3000, followed by 1.2950 and 1.2900.

Silver Falls on Trade Turmoil Despite Gold Rally

Silver fell over 4% to below $31.90 on Thursday, hitting a one-week low as Trump’s sweeping tariffs fueled market uncertainty. A 10% base tariff on all imports was announced, with higher rates for China (34%), the EU (20%), and Japan (24%), along with an immediate 25% levy on foreign-made cars. Trump defended the move as a way to support U.S. manufacturing and cut trade deficits. While gold hit a new record, silver declined amid a broader commodity selloff. U.S. data showed March manufacturing contracted, and February job openings fell to 7.57 million. Markets now turn to Friday’s nonfarm payrolls for economic signals.

If silver breaks above $32.50, resistance levels are at $33.00 and $33.80. Support stands at $30.85, followed by $30.20 and $29.00.