Swissquote Bank Ltd just published an interesting report which is worth a read. It looks at the likely impact of the recent tariff policy laid down by U.S. President Donald Trump. Recommendations This report is intended to provide information and foster discussion. It explicitly mentions at the bottom that it must not be considered as an invitation to purchase or sell any currency or other financial instruments. Swissquote Bank Ltd maintains no obligation to update or sustain the report’s information, urging recipients to rely on their judgment.
The report indicates an impending reversal in the US dollar’s fortunes. Here’s the rub, though. Name that relief this produces good news because it means the tariffs’ damage to American exports will be muted. Deepening retaliation from the United States’ major trading partners would be damaging to prospects for US growth. This part of the equation could add downward pressure on the dollar as well.
Then, on Wednesday, President Trump signed a proclamation directing the Secretary of Commerce to impose a 25% tariff on auto imports, rattling global markets. Gold has proven a safe hedge against the Trump tariffs. Recent tariff announcements directly from the President have only increased its value.
US tech stocks have been getting pummeled on the absence of fresh, new catalysts. The pessimistic mood in US stocks is beginning to rub off on European indices too. European equity investors have had to confront the very real possibility of an aggressive tariff regime, on top of massive government spending that equity investors have already priced in.
The forex market is just as much, if not more, affected by these ongoing developments. Continuing that bullishness into Thursday’s European session the GBP/USD pair is still strong, remaining above 1.2900 firmly. Markets and traders are anxiously judging the impact of President Trump’s most recently announced tariffs. Even with the dollar under persistent downward pressure, traders are still glued to news flow on tariffs and murky US economic indicators of mid-tier importance.