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%.

[Zeologic]

AUD/USD extends gains, could it reach the 200-day MA?

The AUDUSD currency pair on Wednesday drew a bullish candle with a lower high. The price formed a high of 0.63911 low of 0.63222, and closed at 0.63727. This increase extended the bullish sentiment of AUDUSD that started on April 9, where AUDUSD collapsed at a low of 0.559134.

The bullish sentiment on AUDUSD gives hope that it can reach the resistance level based on the 200-day MA at 0.64795. However, it must be able to pass the resistance of 0.63084, which is the high price on February 21. The previous increase was driven by optimism around China's GDP, which grew 5.4% year-on-year in Q1, beating estimates. However, this rebound remains fragile amid ongoing US-China trade tensions and the Aussie's role as a proxy for Chinese demand.

The trade war remains a key issue for the Australian dollar, given Australia’s close economic ties with China and its heavy reliance on commodity exports, which increases its exposure to these tensions. President Trump’s decision to impose tariffs of between 10% and 50% has sparked talk of retaliatory measures, raising fears of a full-blown trade war. Such a development could dampen global growth, push up consumer prices, and complicate central bank policy decisions.

The US-China trade war has been the most in the spotlight for economists, with President Trump imposing tariffs of 145% on certain Chinese goods. China retaliated shortly after with tariffs of 125% on US goods imported into China, up from 84%. This has again angered the US, which has threatened to impose tariffs of 245%, as China has retaliated with increased tariffs.

Australia’s strategists say the Australian dollar remains a barometer of the US-China trade dispute. The RBA is likely to ease policy in May, but the main driver of the AUD will be developments in the commodity trade. Domestically, the Australian economy is facing pressure from global decoupling, and an expected RBA interest rate cut in May could limit upside potential.

The dollar index, which is the benchmark for the USD against six major currencies, is still weakening. The DXY shows a bearish sentiment with a bearish candle with a low of 99.174 failing to extend its recovery after reaching a high of 100.104. The DXY is moving away from the 20-day MA, which reflects a strong bearish sentiment.

US retail sales showed an increase of 1.4% MoM in March, slightly above expectations, while retail sales YoY rose 4.6%. On the other hand, China's Q1 GDP surprised to the upside at 5.4% YoY; March activity indicators also beat estimates.

The RBA is expected to cut rates in May, although China's proxy status makes the AUD vulnerable to external headwinds. However, Governor Michele Bullock highlighted the challenge of bringing inflation back within the 2-3% target. This decision is generally considered hawkish, reducing the possibility of a 25 basis point rate cut at the May 20 meeting from 80% to 70%.

Today, investors will highlight some important economic data, Employment Change and Unemployment Rate in Australia, which may trigger the movement of AUD today. On the other hand, the US will also release Unemployment Claims data, which is expected to increase slightly. And what is awaited is the speech of Fed Chair Powell, who speaks on the economic outlook at the Economic Club of Chicago, which may give subtle hints that are hawkish or dovish and can trigger market speculation.

Edited April 16 by Zeologic

[Zeologic]

Oil prices rise in response to US sanctions on Iran

WTI oil prices rose, breaking out of the consolidation zone, extending the previous bullish candle, and successfully breaking through the resistance zone of 61.28. Yesterday, WTI oil prices with the symbol XTIUSD drew a long-bodied bullish candle with few shadows. Oil prices formed a high of 64.17, a low of 61.95, and a closing at 63.65.

Oil prices plunged to a low of 54.72 on April 9 but quickly rebounded to a high of 62.49 on the same day. Fluctuations in oil prices occurred along with Trump's tariff policy, which had an impact on several financial markets. Another reason is a rumour that OPEC+ will increase supply in May.

Recently, oil prices rose due to concerns about a tighter supply chain following new US sanctions on Iran. On Wednesday, the Trump administration announced new sanctions targeting Iranian oil exports, including measures against a "teapot" refinery based in China. The US move is aimed at suppressing Iranian exports amid rising tensions over its nuclear program. According to a statement from the US Treasury Department, the sanctions are intended to prevent Chinese imports of Iranian oil as President Trump ramps up his “maximum pressure” campaign, which aims to reduce Iranian oil exports to zero.

Elsewhere, OPEC said it had received new plans from Iraq, Kazakhstan, and other producers planning additional production cuts to offset previous overproduction.

On the oil demand side, crude oil prices are supported by optimism amid US-China trade negotiations. China has shown a willingness to engage in talks, provided several key conditions are met. Oil prices have risen more than 2% this week, positioning themselves for the first weekly gain this month.

However, despite the support from the oil price increase, analysts are still skeptical about further gains as OPEC, the International Energy Agency (IEA), Goldman Sachs, and JP Morgan have all lowered their oil demand forecasts due to trade tensions caused by the trade war. Elsewhere, the WTO has also lowered its global trade forecast from previously projecting a 3.0% expansion to a 0.2% decline this year.

[Zeologic]

Market sluggish due to bank holiday, EUR/USD slightly up in weekend trading

The weakening dollar index (DXY) impacts the EURUSD currency pair following the rising channel. In Friday's trading session, EURUSD drew a bullish candle with a body almost the same as the previous bearish candle. The price formed a high of 1.13978, a low of 1.13573, and a closing of 1.13929.

The EURUSD price movement on Friday tended to be flat, which was seen on the hourly timeframe from the emergence of the Bollinger band squeeze, which reflected very low market volatility. Many European and Australian banks were closed to commemorate Good Friday, which has significantly reduced forex trading volume and caused the market to be sluggish. Today, many banks are mostly closed to commemorate Easter Day, which is predicted to have an impact on the sluggish currency market.

Although there was no high-impact news release today, investors' focus is still more on the United States' (US) controversial trade policies. Although the dollar index (DXY), which is used as a benchmark for the USD against six major currencies, has weakened significantly, the Trump administration seems to be moving forward with imposing tariffs on Chinese ships docked in US ports, further escalating the China-US trade war. The two largest economies could cause a global economic downturn.

Trump’s massive tariffs on many countries, including Europe, could change the international trade landscape in the long term. As stated by European Commission President Ursula von der Leyen, who asserted that the traditional idea of a united West is a thing of the past. She indicated that the European Union (EU) no longer sees the United States (US) as its most important trading partner, following the massive tariffs imposed by President Donald Trump.

Ursula’s comments came after the Trump administration imposed a massive 20% tariff on all EU goods and a 25% tariff on all car imports in an attempt to eliminate what Washington sees as a large trade deficit. The EU responded by introducing a series of retaliatory tariffs of 25% on US imports. Trump then announced a 90-day pause on most global tariffs last week.

The impact of Trump’s tariffs has been that more countries are trying to approach the EU as their trading partners. Ursula said that trade with the US is only 13%, and 87% of world trade is done with other countries.

Earlier this month, French President Emmanuel Macron urged European companies to halt new investments in the US, asking, “What message are we sending by investing billions of dollars… while they keep hitting us?”

Meanwhile, the US also appears to be experiencing political turmoil, with Trump even threatening to dismiss Powell over his dissenting views on tariffs and interest rate policy. While market participants did not react much to this statement, recently, White House Senior Advisor Kevin Hassett confirmed that “Trump is studying whether firing Powell from the Fed is an option.”

The dollar index (DXY) is currently trading at a low of 99.229, although still within its previous low range but is well below its 20 EMA, indicating strong bearish sentiment, with the DXY likely to fall further if it breaks the low of 99.104.

[Zeologic]

Gold prices are getting higher amid the US-China trade war

Although some banks in Europe closed yesterday to celebrate Easter, it seems that this did not stop the increase in gold prices. Gold again formed a new all-time high at 3430 after successfully breaking the prior ATH of 3357. The gold price drew a long bullish body candle with almost no shadow on the top and bottom of the candle. The gold price formed a high of 3430 low of 3328, closing at 3423.

Will gold soon reach 3500 as some analysts hope, or are they wary of a possible reversal?

The main US-China trade war has created market uncertainty and fear of recession. Gold, as a safe-haven asset, benefits from market uncertainty. However, the gold price also fluctuates; when the price is considered overvalued, it allows some investors to release gold to take profit. This could cause a temporary reversal if the market releases large amounts of gold.

Recently, China threatened countries negotiating tariffs with the Trump administration. China said that the soft approach would ultimately fail on both sides and harm the other party. They also emphasized that negotiations conducted by several countries with the US would sacrifice the interests of that country. Furthermore, China threatened to take retaliatory action against countries that negotiate tariffs that sacrifice China's interests.

Almost all countries were imposed a base import tariff of 10% by Trump, while China imposed a base tariff of up to 145% and a reciprocal tariff of up to 245%.. China then responded with a 125% tariff on imported goods from the US.

Meanwhile, in the US, the feud between Powell and Trump has become a hot issue in the country, reflecting the political turmoil over the country's economic instability. Trump threatened to fire Powell because Trump was dissatisfied with the Fed, which was burning amid the polemic of Trump's tariff policy. Trump has repeatedly said that he wants interest rate cuts to help stimulate economic growth, along with the tariff policy he has implemented. However, the Fed has not yet cut interest rates. On the other hand, the Fed is being more cautious in its interest rate policy because the inflation target has not been achieved amidst a tariff policy that is predicted to cause an increase in inflation.

The Fed's current interest rate is 4.50%. According to the CME Group's Fedwatch tool, the Fed is expected to keep interest rates unchanged at its May 7 meeting with a probability level of 96.3%.

The dollar index (DXY), which tracks the performance of the USD against six other major currencies, is increasingly slumping to a low of 97.92 after breaking a low of 99.222. The DXY price is increasingly moving away from the EMA 20, reflecting strong bearish sentiment even though the RSI has pointed to level 23, which is the oversold zone level.

[Zeologic]

GBP/USD is slightly down amid talk of Trump firing Powell

Yesterday, the GBPUSD price drew a bearish candle with a shadow on the top of the candle. The price formed a high of 1.34236, a low of 1.33269, and a close of 1.33285. GBPUSD had previously had more consecutive increases by drawing bullish candles since April 8. However, Trump's talk of trying to fire Powell, which would interfere with the Fed's independence, ended the long GBPUSD rally.

Trump has criticized the Fed leader, calling him a "big loser" and "Mr. Late" and arguing that he has not lowered interest rates quickly enough to support the broader economy. The Wall Street Journal reported that Trump may be preparing the ground to blame Powell for the economic weakness caused by the president's tariff policies.

Concerns have been growing that if Trump fires Powell, whose term ends in May 2026, jitters in financial markets - already shaken by Trump's tariffs - will intensify.

According to Capital Economics analyst Paul Ashworth, if Trump is determined to cut rates, he would also have to fire the other six Fed members, which would trigger a more severe market reaction, with the dollar falling and rates at the long end of the yield curve rising. Meanwhile, Sen. Elizabeth Warren, D-Mass., warned that U.S. markets would “fall apart” if President Donald Trump were to fire Federal Reserve Chairman Jerome Powell, saying the central bank’s decisions should remain independent of politics.

The dollar index (DXY), which tracks the greenback against a basket of six major currencies, rose from a low of 98.013 to a high of 98.995 as the greenback attempted to recover from the previous session’s losing streak. However, the dollar’s strength has not shown any strong signs of a reversal, with prices still far below the 20-day moving average (EMA).

Meanwhile, weaker-than-expected UK inflation data and a weak labor market have raised the possibility that the Bank of England could cut interest rates at its upcoming May meeting.

Today, the UK and US will release economic data, a Purchasing Managers' Index (PMI), which measures the level of diffusion index based on purchasing managers surveyed in the manufacturing industry. The US 10-year Treasury yield fell slightly to 4,370 from a high of 4,439 according to Investing.com.

[Zeologic]

Why is the Canadian dollar strengthening against the US dollar amid Trump tariffs?

Amid President Trump’s tariff war against Canada, the Canadian dollar weakened to 1.47920 on February 3, when Trump's tariff talks were already coming up against Canada and Mexico. However, on the same day, the Canadian dollar strengthened and closed at 1.44238. The Canadian dollar’s strengthening was extended the following day, but then it fluctuated amid the China-US trade war.

Looking at the monthly timeframe, three candlesticks drew more bearish candles, indicating the strengthening of the Canadian dollar against the US dollar.

Why did this happen?

Trump's controversial policies and more uncertainty hanging may be the reason for the weakening of the US dollar, which is indicated by the DXY value, which is decreasing more and moving below the EMA 20. DXY is now at 99.301, drawing a bearish candle far below the EMA 20.

President Donald Trump has previously imposed reciprocal tariffs on a number of countries, but finally, there was a 90-day delay in the tariffs during the negotiation process with the affected countries. This delay actually caused uncertainty in the US economy and pushed up US Treasury yields, which indicated that more investors were selling bonds, causing yields to rise higher.

The recent Canada-US tariff war remains a major issue for the Canadian dollar. US President Donald Trump said on social media that he would impose an additional 25% tariff on Canadian steel and aluminium, bringing the total tariff to 50%, in response to tariffs on electricity exports from the Canadian province of Ontario. The new 50% tariff was eventually scrapped by Canada after talks between Ontario Premier Doug Ford and US Commerce Secretary Howard Lutnick.

Canada, one of America’s closest trading partners, has borne the brunt of Trump’s ire as he waged a trade war in his first months in office. Trump imposed a 25 per cent overall tariff on Canada and Mexico, which took effect on March 4. The uncertainty caused by the trade war has been a factor in the weakening of the US dollar, despite the Fed’s lack of indications of a rate cut, although Trump has threatened to fire Powell for being too slow to cut rates.

Many analysts are worried about a recession, with JPMorgan noting concerns that the economic impact could be exacerbated by potential retaliation, supply chain disruptions, and a hit to business confidence.

However, these concerns were dismissed by the IMF, which believes that there will be no recession for several reasons, such as domestic economic resilience, adaptive monetary policy, and a focus on structural reforms.

Today, Canada will release economic data on retail sales, which are expected to rise by -0.4% from the previous -0.6%