Forex Today: Markets remain on edge, await US tariff announcements
Here is what you need to know on Tuesday, April 1:
Markets cling to a cautious stance on the first day of April as they await reciprocal tariff decisions from the US, which are expected to be announced at 19:00 GMT on Wednesday. In the European session, March inflation data from the Euro area will be watched closely and the US economic calendar will feature JOLTS Job Openings data for February and ISM Manufacturing Purchasing Managers Index (PMI) report for March.
US Dollar PRICE Last 7 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | 0.01% | -0.57% | 0.53% | 0.47% | 1.00% | 0.09% | |
| EUR | 0.06% | 0.06% | -0.53% | 0.58% | 0.55% | 1.05% | 0.14% | |
| GBP | -0.01% | -0.06% | -0.60% | 0.52% | 0.49% | 1.00% | 0.04% | |
| JPY | 0.57% | 0.53% | 0.60% | 1.11% | 1.09% | 1.58% | 0.66% | |
| CAD | -0.53% | -0.58% | -0.52% | -1.11% | -0.02% | 0.47% | -0.48% | |
| AUD | -0.47% | -0.55% | -0.49% | -1.09% | 0.02% | 0.50% | -0.42% | |
| NZD | -1.00% | -1.05% | -1.00% | -1.58% | -0.47% | -0.50% | -0.95% | |
| CHF | -0.09% | -0.14% | -0.04% | -0.66% | 0.48% | 0.42% | 0.95% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Dollar (USD) benefited from the risk-averse market atmosphere in the first half of the day on Monday. Following a bearish opening, Wall Street's main indexes staged a rebound later in the American session and limited the USD's gains. US President Donald Trump reiterated late Monday that his reciprocal tariffs plan will target all countries.
During the Asian trading hours, the Reserve Bank of Australia (RBA) announced that it left the policy rate unchanged at 4.1%, as expected. In its policy statement, the RBA noted that the uncertainty about the outlook abroad remains significant. While speaking in the post-meeting press conference, RBA Governor Michele Bullock said policymakers did not discuss a rate cut and explained that they will be waiting for more data before taking the next step. After losing nearly 0.7% on Monday, AUD/USD holds its ground and trades marginally higher on the day at around 0.6250 in the European morning. Meanwhile, the data from China showed that the Caixin Manufacturing PMI improved to 51.2 in March from 50.8 in February.
EUR/USD struggles to gain traction and trades near 1.0800 after posting small losses on Monday.
GBP/USD recovered modestly after dipping below 1.2900 on Monday and ended the day marginally lower. The pair stays relatively quiet and fluctuates in a narrow channel at around 1.2920 to start the European session.
The Unemployment Rate in Japan edged lower to 2.4% in February from 2.5% in January. Other data from Japan showed that the Tankan Large Industry Capex rose by 3.1% in the first quarter. USD/JPY showed no reaction to these data and was last seen moving sideways slightly below 150.00.
Gold set a new all-time high near $3,150 during the Asian session on Tuesday after rising more than 1% on Monday. XAU/USD corrects lower toward $3,130 in the European morning.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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