Tariff Delay Calms Markets; Focus Turns to Powell (04.15.2025)

The U.S. dollar index stabilized near 100 on Tuesday after a three-day slump, as the White House paused some tech tariffs and hinted at a delay in auto levies. 

EUR/USD hovered near 1.1330, while the yen softened on reduced safe-haven demand. Gold rose past $3,220 as Fed rate cut bets intensified following comments from Governor Waller. Sterling climbed to a six-month high despite expectations of BoE easing, and silver paused after a four-day rally. Markets now look ahead to U.S.-Japan trade talks and Powell's upcoming remarks.

EUR/USD Keeps Steady Amid Policy Reprieve

EUR/USD hovered near 1.1330 Tuesday, while the dollar index edged up toward 100, rebounding from 3-year lows as sentiment stabilized. The recovery followed Trump’s tariff exemptions on tech goods and a possible pause on 25% auto tariffs. However, caution lingered after the Commerce Department launched a national security probe into semiconductor and pharmaceutical imports. Fed Governor Waller called tariff-driven inflation “transitory” and signaled openness to further rate cuts to support growth. The dollar had slumped for three days on policy uncertainty and a broad U.S. asset selloff.

Key resistance is at 1.1400, followed by 1.1475 and 1.1500. Support lies at 1.1260, then 1.1180 and 1.1100.

Tech Tariff Pause Pressures Yen

The Japanese yen slipped below 143 per dollar Tuesday as risk appetite improved, reducing safe-haven demand. The shift followed Trump’s tariff exemptions on select tech goods and the possible delay of the 25% auto tariff. Still, caution persisted after the U.S. launched a national security probe into semiconductors and pharmaceuticals, which are key Asian exports. Focus now turns to U.S.-Japan trade talks later this week, with Japan’s Akazawa Ryosei meeting Treasury Secretary Bessent and Trade Rep. Greer. Japan, currently under a reduced 10% tariff, is expected to seek better terms.

Key resistance is at 144.20, with further levels at 148.30 and 152.50. Support stands at 141.80, followed by 141.00 and 139.65.

Gold Climbs on Rate Cut Bets

Gold rose above $3,220 on Tuesday as uncertainty over Trump’s tariff plans increased safe-haven demand. After exempting some tech goods, the administration may also exclude auto parts, but new national security probes into pharma and semiconductor imports could result in more tariffs. Fed Governor Waller said rates may need to be cut if tariffs stay, further supporting gold. Markets now price in 86 bps of Fed rate cuts by year-end, with no change expected next month.

Key resistance is at $3,250, followed by $3,300 and $3,350. Support stands at $3135, then $3100 and $3067.

GBP Gains Despite BoE Cut Expectations

The British pound rose above $1.317, a six-month high, as the dollar weakened on US trade policy uncertainty. Markets reacted to Trump’s temporary tariff exemptions on Chinese electronics, though more levies may follow. Despite the pound's strength, traders still expect 75 bps of BoE rate cuts this year. BoE’s Megan Greene noted uncertainty over tariffs and FX impact on UK inflation. Eyes now turn to upcoming UK jobs and inflation data.

If GBP/USD breaks above 1.3200, resistance levels are at 1.3270 and 1.3430. Support is at 1.3015, followed by 1.2900 and 1.2700.

Silver Eases as Rally Pauses

Silver opened slightly lower after a four-day rally, entering a correction phase following recent volatility. The metal remains sensitive to trade tensions and upcoming comments from Fed Chair Powell, as markets weigh growth concerns against inflation expectations for clues on future policy.

Geopolitical uncertainty from the ongoing U.S.-China trade war continues to weigh on sentiment.

Resistance levels are seen at 32.50, with further hurdles at 33.00 and 33.80, while support is located at 31.40, followed by 30.20 and 29.20 if the decline extends.