The euro surged towards the US greenback following US President Donald Trump’s reciprocal tariff announcement on Wednesday night time. The EUR/USD pair jumped 0.5%, or greater than half of a US cent, to 1.0915 at 5:17 am, nearing a five-month excessive of 1.0953. The extent virtually recovered all of the losses since Trump was re-elected on 5 November.
The US president mentioned his administration would impose a minimal 10% tariff on all international locations and extra levies on nations thought of offenders. He displayed a chart itemizing the international locations topic to increased tariffs, with China, the European Union, and Vietnam as the highest three, dealing with charges of 34%, 20%, and 46%, respectively. The extra price will push import duties on China to 54% on high of the prevailing 20% blanket tariffs.
The US greenback weakened broadly towards most different main currencies, significantly the Japanese yen, the euro, the British pound, and the Swiss franc, as merchants anticipated financial backlash to the US, with 10-year US Treasury yields plunging to their lowest stage since October 2024.
Nonetheless, commodity currencies, significantly the Australian greenback and the Canadian greenback, weakened towards the buck. These currencies are tied to world commodity costs, similar to copper and crude oil, which noticed sharp declines throughout Thursday’s Asian session. The sweeping reciprocal tariffs sparked fears of an all-out world commerce battle, elevating considerations a couple of sharp financial downturn and even a broader recession, which, in flip, weakened industrial metallic and power demand outlooks.
International inventory markets tumble
The announcement spooked world markets, sending inventory markets tumbling throughout Asia on Thursday. The Japanese inventory market led broad losses, with its benchmark Nikkei 225 falling practically 3% in the course of the session, adopted by China’s Grasp Seng Index, sliding 1.5%, whereas Australia’s ASX 200 and South Korea’s Kospi have been down 1%.
Notably, massive miners’ shares led the broad losses within the Australian fairness market, with BHP down 2.4% and Rio Tinto slumping 2.8%. The drop in copper closely weighed on regional markets, with the impression possible spilling into the UK’s equities because of the dual-listed nature.
“Whereas Australia’s direct commerce publicity to the US is minimal, the knock-on results through China and broader Asian nations which have seen hefty tariffs may weigh on our export-heavy financial system, particularly if world demand slows and commodity costs retreat,” Josh Gilbert, a market analyst at eToro, wrote in a notice.
US inventory futures plunged, with the Dow Jones Industrial Common falling 2.01%, the S&P 500 slumping 2.78%, and the Nasdaq declining 3.3%, pointing to a sharply decrease open on Thursday. The selloffs are set to ripple by European markets as we speak, as Germany’s DAX futures had already dropped 1.89% at 5:30 am Central European Time.
Know-how shares are set to plunge, as indicated by the prolonged buying and selling session on Wall Avenue. The Magnificent Seven shares all declined considerably in after-hours buying and selling, with Tesla’s shares slumping 4.5%, Apple down 2.3%, and Nvidia sliding 2.4%. “There may be clearly going to be an impression that weighs on these tech titans, particularly when you think about Apple’s heavy publicity to China and Nvidia’s reliance on Taiwan,” Gilbert added.
Gold surges to a brand new excessive
Threat-off sentiment despatched gold costs surging to a brand new all-time excessive, with gold futures leaping to $3,195 per ounce at COMEX and spot gold rising to as excessive as $3,167 per ounce earlier than retreating.
Uncertainties will stay, which may present additional upside potential for the yellow metallic. “There was no clear indication that the Trump administration will cease right here with ‘commerce wars.’ That would imply additional uncertainty,” mentioned Kyle Rodda, a senior market analyst at Capital.com.
Gold, seen as a typical haven asset, rose 20% this 12 months, following a 30% rally in 2024, making it probably the greatest performers amongst asset courses. Central banks’ elevated buying, suspicion of a debasement within the US greenback, and traders’ hedging positions all contributed to the valuable metallic’s value surge in recent times.
