The EUR/USD pair saw aggressive selling pressure for the second week in a row. It finished the week virtually flat having traded mostly in the 1.0820 range. This occurs as the US Dollar is torn between tariff-driven pressure and weak US economic data. Twists and turns that have sapped the US Dollar’s safe-haven appeal. Consequently, they have sustained pressure on the currency pair. The market’s guarded sentiment is further compounded as ECB rate cut uncertainty looms in April. Traders are cautiously optimistic, watching closely to see what may develop from here.
Early in the Asian session on Monday, the AUD/USD pair was down to the negative side around 0.6280. This decrease is a sign of wider market fears, particularly as investors process tariff changes recently implemented by the former President Donald Trump. The trade-weighted average tariff rate on all US imports has increased by approximately 5.5-6.0 percentage points, bringing it close to levels not seen since the Second World War. These tariffs have already erected a confusing tariff landscape making reciprocating tariffs even more of a danger to plunge the market into chaos.
His tariff announcements have pushed beyond the ever-expanding trade disaster to engulf other financial markets. At worst, they can exacerbate volatility in the XAU/USD pair. This shift would be primarily motivated by tariff fears and the upcoming release of important key employment data. That risk of increased volatility makes it even more important for investors to be aware of these changes and pay careful attention.
International markets are adjusting to these tariff shifts. There are indications that shifting the pathways of trade would erode the long-term benefits that would stem from such actions. Tariffs are effective short-term leverage. Their effectiveness can quickly fade as markets adjust and find new ways around the blockades or more efficient trade routes.