On Thursday, April 3rd, 2025, President of the United States Donald Trump announced new import tariff policies along with reciprocal measures early in the morning. Trump declared a 10% increase in import tariffs on all countries.
In addition, under the reciprocal policy, several nations will face even steeper tariff hikes. China, which boasts the largest trade surplus, will now incur a 54% import tariff, followed by the European Union at 20%. Other Asian countries such as Vietnam, Cambodia, South Korea, Japan, and India will also experience significant tariff increases.
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The financial markets reacted with high volatility this morning in response to the new policies, resulting in a decline of the US dollar. This is due to growing concerns about a potential slowdown in the American economy.
GOLD
The price of Gold (XAUUSD) surged, setting a new all-time high of US$3,167.65 per troy ounce. Compared to Wednesday’s closure, Gold has increased by over US$34 or 340 pips.
Trump’s latest policy risks igniting a larger trade war and could suppress global economic growth. As a result, demand for Gold as a safe haven asset has intensified. This sentiment is likely to affect Gold prices in the European trading session.
OIL
The price of Oil (CLS10) fell by US$1.41 to US$69.25 per barrel at the start of trading today. The plunge is attributed to Trump’s policies that may dampen global economic growth.
An economic slowdown could lead to a decrease in Oil demand, resulting in negative sentiment that will likely persist in the European trading session.
EURUSD
EURUSD experienced a drop to 1.08051 this morning before rebounding to 1.09246, despite the looming risk of a larger trade war between the United States and the European Union.
In the European trading session, the release of the Eurozone Producer Price Index (PPI) data at 16:00 WIB may influence EURUSD movements. Trading Central forecasts the PPI for February to grow by 3.4% year-on-year (YoY), significantly higher than the previous month’s increase of 1.8% YoY.
Results exceeding forecasts could boost positive sentiment for EURUSD.
GBPUSD
GBPUSD soared to 1.30767 in today’s trading, marking an increase of 707 points (70.7 pips) from Wednesday’s close and reaching the highest level since mid-October.
The surge is attributed to the fact that the UK is only subject to a 10% import tariff, whereas the previous estimates indicated a 20% increase. This sentiment will continue to influence GBPUSD trading in the European session.
USDJPY
USDJPY plummeted by more than 2,100 points (210 pips) to 147.116 in today’s trading. This drop is a result of broadening trade war risks, which could weigh down US economic growth and create negative sentiment for USDJPY.
This sentiment will likely carry over into the European trading session.
Nasdaq
The Nasdaq index fell by 1.133 points (113.3 pips) to 18,818 at the start of today’s trading, marking its lowest level since September 11. Escalating trade war risks are sending negative signals to global stock indices.
This negative sentiment is expected to loom over the European trading session.
