The Japanese yen is rallying on Monday, boosted by safe-haven flows, while gold pushed to fresh record highs amid the uncertainties surrounding Trump’s trade tariffs.
The Australian dollar remains range-bound near the 50-day EMA, with traders watching Chinese demand and global trade tensions for a potential breakout.
Global stocks extended their decline for a fourth consecutive day as President Donald Trump prepared to unveil new tariffs, intensifying fears of a global trade conflict and its potential economic fallout.
Investors expect further trade shocks as Trump’s 25% tariff on automobiles takes effect this week, raising fears of retaliation from key trading partners.
The Australian dollar was the strongest major currency last week, while the Japanese yen was the weakest, although the numbers were practically negligible. Volatility decreased over this period, and the coming week will likely see more volatility.
The euro witnessed a slightly positive week against the Japanese yen, which is a bit perplexing due to the fact that risk appetite was eviscerated yet again. I think the JPY160 level will continue to be important, and it may even offer support.
The dollar's weakness in Q1 coincided with a pullback in US equities. European investors bought a record amount of US shares in 2024, which helped lift the greenback.
The price of gold rallied sharply on Friday, as it hit a new record high of $3,086 amid uncertainty over US trade policy. Additionally, an uptick in the Federal Reserve's preferred inflation gauge was seen.
The sticky inflation narrative hasn't exactly been the tailwind dollar bulls were hoping for. In fact, the greenback’s muted reaction—despite a hotter-than-expected core PCE print—might be flashing early warning signs.
The US Dollar Index, which measures the value of the US Dollar against a basket of currencies, is currently flat near 104.30 on Friday following the release of the Fed preferred inflation metric — the PCE Price Index.
