Today market outlook

[Zeologic]

Gold price plunges amid trade war and global risk sentiment

Trump's reciprocal tariff policy has had a tremendous impact on the financial market. Many stocks have plunged after President Donald Trump implemented tariffs. Gold has depreciated for three consecutive days, drawing bearish candles. Yesterday, gold closed lower at 2956 near the 50 MA, which could be a support zone in this area. The price has formed a high of 3054, a low of 2956, and a close of 2982 on the FXOpen platform. The long body of the candlestick reflects the high volatility that has occurred.

The impact of President Donald Trump's reciprocal tariffs on Wednesday brought the US dollar and other safe-haven currencies after the USD hit a six-month low. The dollar index (DXY) is now at a high of 103.584, up from a low of 102.540, which had reached its lowest level at 101.267.

Last Friday, China retaliated by imposing 34% tariffs on all US imports, triggering turmoil in financial markets as most global equity indices posted losses. Trump’s reciprocal tariffs appear to have caused most markets to plunge, but on the other hand, US Treasury yields have risen, with the 10-year bond up almost fifteen basis points to 4.15% at the last update on April 7. The 20-year bond also rose by 0.15% and the 30-year by 0.17%.

Ahead of the week, the US economic docket will feature the release of the Federal Open Market Committee (FOMC) meeting minutes, followed by the release of consumer and producer inflation data.

Tariff-related developments and trends across all assets will dominate the scene over the next few days. At the moment, the USD is still likely to see some uptick in demand, but that could change given the main fear is that tariffs will lead to higher inflation along with an economic recession. Markets are predicting a bleak future for the US, which will have implications for all other major economies.

[Zeologic]

USD/CNH hits record high amid Trump's reciprocal tariffs

CNH, the symbol for China's Renminbi currency traded offshore outside mainland China, weakened against the USD to its lowest at 7.4288. This exchange rate is higher than the USDCNH exchange rate in history. Yesterday, USDCNH drew a long-bodied bullish candle with almost no shadow. The price formed a high of 7.4288, a low of 7.3361, and a close of 7.4239.

The offshore yuan hit a record low amid the trade war triggered by President Donald Trump's massive tariffs that have rocked financial markets. Many stocks plunged after Trump's reciprocal tariffs were announced to several countries.

Meanwhile, Trump's tariffs provided more benefits for the Swiss Franc and Japanese Yen, which are considered safe-haven currencies. Meanwhile, the Dollar Index (DXY), which tracks the performance of the USD against six major currencies, showed a decrease in value at 102.753, down from 103.441 on Tuesday. USD has weakened more since January 2025 although its value is always fluctuating. DXY is now still moving below the EMA 20 indicating that there is still potential for bearish sentiment.

The increasingly uncontrolled trade war between China and the US seems to be the trigger for the weakening of the Chinese currency. US President Donald Trump has threatened to impose an additional 50% tariff on Chinese imports. Meanwhile, China will impose a 34% tariff on US goods starting April 10, 2025, tomorrow. The Tariff Commission of the State Council of China said that what the US did was not in line with international trade rules. It was also called an intimidation practice.

Meanwhile, Finance Minister Scott Bessent said that 70 countries had asked to enter into negotiations with the US. This will directly involve President Donald Trump in trade.

The market turmoil caused by Trump's trade tariffs seems to provide hope for a Fed interest rate cut. According to the Fedwatch tool of CME Group, the potential for an interest rate cut to 4%-425% has increased to 55.6%, while the potential for an unchanged interest rate has decreased to 44.4%.

Today, the RBNZ will announce interest rates, which are expected to fall by 3.50% from the current interest rate of 3.75%. Investors will also be paying attention to a speech by BOJ Governor Kazuo Ueda that could provide hawkish or dovish hints on Japan’s economic outlook.

China will release today the value of new yuan-denominated loans issued to consumers and businesses during the previous month, which is expected to have risen to 3,020 billion from 1,010 billion previously.

[Zeologic]

Australian dollar strengthens as Donald Trump suddenly delays tariffs for 90 days

Donald Trump's tariff retort has rocked financial markets again. United States (US) President Donald Trump announced a 90-day pause on implementing new tariffs for several countries on Wednesday local time.

The delay has caused the USD to weaken again, the AUD/USD pair is seen rising, drawing a bullish candle that is longer than the previous bearish candle. The price formed a high of 0.61758 low of 0.59134, closing at 0.61473.

In Trump's post on Truth Social, he decided to delay the implementation of tariffs in full to more than 75 countries because these countries have contacted US officials to negotiate to find the right solution to the trade problems that he has conveyed in the implementation of the new duties.

Trump also wrote that he would raise tariffs on imported goods from China to 125%, effective immediately. The tariff increase for China was imposed because Beijing was considered to be less respectful of the World Market.

On the other hand, China has again retaliated by raising import tariffs on US goods to 80% from 34%, which will take effect on April 10.

Fed officials noted that uncertainty surrounding trade dynamics and inflation limits their ability to move quickly on interest rates. Barkin of the Richmond Fed and Musalem of the St. Louis Fed emphasized that tariffs complicate the policy landscape and could delay future interest rate adjustments.

According to the CME group's Fedwatch tool, the probability of the Fed leaving interest rates unchanged has increased by 83.0%, while the probability of a rate cut is only 17.0%, which had previously increased due to Trump's reciprocal policy.

The dollar index (DXY), which tracks the USD against six major currencies, had fallen to a low of 101.837, which then rose to close at 102.993 in response to the tariff delay. Visually, DXY is still moving below EMA 2,0, reflecting bearish sentiment.

Today, investors will focus on several US economic indicators for CPI and unemployment claims, and RBA Gov Bullock Speaks Due to speak at the Chief Executive Women 40th Anniversary Melbourne Annual Dinner.

[Zeologic]

The Swiss Franc is getting stronger amidst the trade war, which triggers uncertainty

The USD/CHF currency pair plunged to its lowest level from 20024 to 2025 at 0.82311 amidst global economic uncertainty amid the US-China trade war. As the country with the largest economy in the world, this tension has led to concerns because the economic downturn of the two countries could affect the economies of other countries.

Yesterday, USD/CHF drew a long-bodied bearish candle with almost no shadow. The price formed a high of 0.85747, a low of 0.82311, and closed at 0.82456. The upper band and lower band that are increasingly moving apart reflect the very high market volatility in Swiss Franc trading, which is one of the safe-haven currencies supported by Trump's tariff policy retiroca.

During the European session, the USD weakened against the Swiss Franc (CHF) amidst increasing trade tensions between the two largest economies, the US and China. The trade war started by Donald Trump with his tariff policy get a response from China.

More than 70 countries affected by Trump’s tit-for-tat tariffs have contacted Trump and are hoping for negotiations, prompting Trump to announce a 90-day pause on many new tariffs on trading partners to 10% to allow for trade negotiations with those countries.

However, US-China trade relations have reached crisis levels, with Trump raising tariffs to 125% on Chinese imports on Thursday, up from 104% imposed just a day earlier.

The dollar index (DXY), which tracks the greenback against a basket of six major currencies, fell sharply amid the poor US CPI data. The DXY declined sharply to a low of 100.700 from a high of 103.027, reflecting the dollar’s continued decline since President Donald Trump took office in the White House. The DXY has fallen from a high of 110.176 to a recent low of 100.700 in January-April 2025.

The Bureau of Labor Statistics reported yesterday that the Consumer Price Index for All Urban Consumers (CPI-U) fell 0.1 percent on a seasonally adjusted basis in March, after rising 0.2 percent in February. Over the past 12 months, the all-goods index has risen 2.4 percent before seasonal adjustments. The energy index fell 2.4 percent in March, as the gasoline index dropped 6.3 percent, more than the electricity and natural gas index rose. In contrast, the food index rose 0.4 percent in March as the food at home index rose 0.5 percent and the food away from home index rose 0.4 percent over the month. The all-goods index, except food and energy, rose 0.1 percent in March, after rising 0.2 percent in February. Meanwhile, unemployment claims were as expected at 223k, up from the previously revised 219k.

Today, investors will be waiting for the Bureau of Labor Statistics to release its Producer Price Index (PPI) report, which is expected to rise 0.3 percent from -0.1 percent. This index measures changes in prices of finished goods and services sold by producers, excluding food and energy.

[Zeologic]

USD/CNH volatility increases amid the US-China trade war

The Chinese Yuan currency pair has experienced increased volatility amid the US-China trade war since President Trump implemented a reciprocal tariff policy against all countries considered detrimental to US interests.

Last week, USDCNH experienced increased market volatility, along with President Trump's implementation of the tariff policy. Yuan Chona weakened and reached a high of 7.4288 on April 8. However, the weakening of the Chinese Yuan did not continue and turned stronger against the USD after Trump announced a 90-day delay in the tariff policy following 70 countries requesting tariff negotiations. This policy seems to be decreasing investor confidence and causing the USD to weaken. USDNH has been bearish for three consecutive days. On Friday, the pair formed a high of 7.3354 and a low of 7.2784, closing at 7.2784, trying to cross the middle band line from the upper side.

The dollar index and dollar index futures each fell about 0.7% in Asian trading, continuing the sharp decline overnight. The dollar index also fell below 100 points, approaching the lowest level last seen in April 2022.

Investors appear to be worried about the possibility of a US recession, especially when President Donald Trump raised tariffs on China to 145%, while China imposed tariffs of 125% on Friday, April 1,1, from the previous 84% announced on Wednesday, April 9, on US goods.

The USD was further pressured by weaker-than-expected consumer inflation data for March. The dollar index (DXY) that tracks the greenback against a basket of six major currencies fell below the 100-day low of 99.014, closing at 99.783 on Friday.

The Fed is likely to show a very cautious stance on Trump's policies, even though analysts expect the Fed to cut interest rates sooner than expected due to the increasing economic pressures from the trade war.

The continued decline in US Treasury prices, amid doubts about the US economy under Trump, also added pressure on the dollar. Yields jumped after a massive sell-off in US Treasuries. The sell-off of US bonds is estimated to have reached US$29 trillion. This massive sell-off has rekindled the Bond Vigilante trend, which reflects a massive sell-off in the bond market due to investor concerns over inconsistent government policies. Their actions have caused yields to rise, which makes government borrowing more expensive. Their actions are a kind of warning from the market.

[Zeologic]

New Zealand Dollar Strengthens for Fourth Day in a Row amid Weakening US Dollar

The NZDUSD currency pair experienced a four-day bullish streak last week, which continued on Monday. Yesterday, NZDUSD drew a long-bodied bullish candle, extending the previous rally. The price formed a high of 0.58914 and a low of 0.50090, closing at 0.58747.

The New Zealand Dollar had depreciated to a low of 0.54851 on April 9 amid news of Trump's reciprocal tariffs and the US-China trade war.

Buying interest in the New Zealand Dollar has not subsided throughout the first half of trading amid a generally weaker US Dollar. The Dollar Index (DXY) is still under selling pressure even though it tried to recover at a high of 100.163 yesterday, but closed at 99.725. The DXY is far below the 20 EMA, indicating strong bearish sentiment.

The New Zealand dollar gained some positive traction as the US dollar weakened after US President Donald Trump announced late Sunday less aggressive tariffs on Chinese imports, including semiconductors and electronics. Trump explained that these goods would still be subject to a 20% tariff on fentanyl rather than the initially rumored 145%.

According to Warketwatch, the 30-year US Treasury yield rose higher than last year, meaning the US government is taking a bigger hit to its fiscal position. Yields are inversely related to prices. Rising yields indicate that bond prices are falling as investors rush to sell them. Friday's sharp rise is evidence that the strategic role of US Treasuries as a safe-haven asset is no longer valid.

This has given rise to the term "Bond Vigilante" which indicates investors punish governments by selling their bonds when they feel they are being too wasteful or fiscally irresponsible.

Trump's seemingly reasonable policies are due to investors being confused about where the Donald Trump administration is headed after the tariff announcement and then the 90-day tariff delay. And the China-US trade war, because Trump took a different policy on China, which increased US tariffs to 145%. This has triggered a trade war, and China retaliated on Friday, raising tariffs on US goods from 84% to 125%.

New Zealand benefits from China's economy because of its economic ties with the country. Good Chinese economic data supported the strengthening of the New Zealand Dollar. China's trade surplus, measured in Yuan, jumped to CNY 736.72 billion from CNY 122 billion in February. Exports rose 13.5% year-on-year, accelerating from 3.4% in February, while imports fell 3.5%, a smaller decline compared to the previous 7.3% decline.

China's General Administration of Customs said that foreign trade has shown growth both quantitatively and qualitatively. Officials reiterated China's determination to take necessary measures to counter US actions and protect national sovereignty.

[Zeologic]

Gold consolidation is not over yet, but positive traction may support it

Yesterday, gold was traded with a small-bodied bullish candle, which was almost the same as the previous bearish candle. Gold consolidated near its all-time high above 3200. XAUUSD formed a high of 3233, a low of 3207, a close of 3228.

Gold selling is still ongoing, but buying is also within normal limits. Investors seem to still be worried about the potential economic impact of the escalating US-China trade war, which in turn supports safe-haven assets such as Gold.

China increased tariffs on US imports to 125% on Friday in retaliation for Trump's decision to raise tariffs on Chinese goods to an unprecedented 145%. This keeps Gold prices close to their all-time highs reached on Monday.

Analysts are concerned about the development of the US-China trade war as the US still imports some hard-to-replace materials from China which has weakened US economic confidence and increased fears of a US recession along with bets that the Fed will soon resume its interest rate cut cycle and reduce the interest rate on loans at least three times through 2025. Low interest rates are beneficial for non-yielding assets such as gold.

Global risk sentiment improved after the White House announced on Friday that smartphones, computers, and other electronics would be temporarily exempted from reciprocal tariffs. Trump said on Monday he was considering a possible exemption for the automotive industry from the 25% tariffs because companies need more time to switch to parts made in the US.

The temporary exemption has fueled market uncertainty, as Trump also threatened to impose tariffs on pharmaceutical products in the near future.

The performance of the US dollar showed a slight recovery near the low of 99.014 formed on April 11. DXY on April 15 rose to a high of 100.276 low of 99.479 and closed at 100.159. Despite the recovery, the transaction volume has not been able to reverse the situation; DXY is still moving below the EMA 20.

Today, investors will wait for US economic data, retail sales are expected to rise 1.3% from the previous 0.2%. Elsewhere, the BOC will release the overnight rate, which is expected to remain unchanged at 2.75%.