Forex Today: It's all about Trump's tariff announcements on "Liberation Day"
Here is what you need to know on Wednesday, April 2:
Choppy action in financial markets continues early Wednesday as investors gear up for US President Donald Trump's tariff announcements at 20:00 GMT. The US economic calendar will feature March ADP Employment Change and February Factory Orders data. Market participants will also pay close attention to comments from central bankers.
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 British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.31% | -0.13% | 0.21% | 0.16% | 0.15% | 0.21% | |
| EUR | -0.07% | 0.24% | -0.21% | 0.14% | 0.11% | 0.08% | 0.14% | |
| GBP | -0.31% | -0.24% | -0.43% | -0.09% | -0.13% | -0.16% | -0.07% | |
| JPY | 0.13% | 0.21% | 0.43% | 0.35% | 0.28% | 0.27% | 0.36% | |
| CAD | -0.21% | -0.14% | 0.09% | -0.35% | -0.01% | -0.07% | 0.03% | |
| AUD | -0.16% | -0.11% | 0.13% | -0.28% | 0.01% | -0.02% | 0.06% | |
| NZD | -0.15% | -0.08% | 0.16% | -0.27% | 0.07% | 0.02% | 0.08% | |
| CHF | -0.21% | -0.14% | 0.07% | -0.36% | -0.03% | -0.06% | -0.08% |
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).
US Treasury Secretary Scott Bessent said late Tuesday that the amounts announced on Wednesday are the highest the tariffs will go. However, countries could then take steps to bring the tariffs down. Meanwhile, the Wall Street Journal reported that policy writers at the Office of the US Trade Representative are putting together a third tariff option to present to Trump, with an aim to smooth tariff goals into a simple, more streamlined offering that would see flat rates across the board.
The US Dollar (USD) struggled to gather strength on Tuesday following the disappointing JOLTS Job Openings and ISM Manufacturing PMI data. The USD Index fluctuates in a tight channel above 104.00 in the European morning on Wednesday, while US stock index futures trade marginally lower on the day.
EUR/USD moves sideways in a narrow band below 1.0800 after posting small losses on Tuesday. Several European Central Bank (ECB) policymakers will be delivering speeches later in the day.
GBP/USD failed to make a decisive move in either direction and the day flat on Tuesday. The pair extends its sideways grind slightly above 1.2900 to begin the European session on Wednesday.
After reaching a new record-high near $3,150, Gold corrected lower and closed in negative territory on Tuesday. XAU/USD holds steady and trades at around $3,110 early Wednesday.
USD/JPY closed modestly lower on Tuesday but managed to find support near 149.00. The pair edges higher and trades above 149.50 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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