Global financial markets faced significant turbulence at the beginning of last week due to the escalation of trade conflicts. This issue is expected to continue shaping the market dynamics during the European trading session on Tuesday (April 8, 2025).
In recent developments, U.S. President Donald Trump has threatened to increase import tariffs from China by an additional 50%. Conversely, the European Union is planning to negotiate with the United States and propose a ‘zero for zero’ tariff scheme.
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This situation presents a mix of negative and positive news regarding the evolving trade war, which is likely to influence market movements.
GOLD
Gold prices (XAUUSD) plummeted over $56, settling at $2,981.76 per troy ounce at the beginning of last week. Furthermore, Gold has experienced a decline for three consecutive days after reaching an all-time high of $3,167 per troy ounce.
This drop in Gold prices can be attributed to the downturn in other asset classes. The decline prompted many investors to liquidate their Gold holdings to cash in on profits and offset losses incurred in other investments.
As other asset movements, especially stock indices, begin to stabilize, and with the potential for heightened trade tensions, Gold may gain positive sentiment once more.
OIL
Oil prices (CLS10) fell by $1.37 to $60.93 per barrel during trading on Monday, marking a one-year low. The sharp decline in Oil prices in recent days is largely due to OPEC+’s plans to increase production levels. Additionally, there is a concern that Oil demand may weaken due to the global economic slowdown resulting from ongoing trade disputes.
This sentiment will continue to impact Oil trading during the European session.
EURUSD
The EURUSD pair exhibited high volatility during Monday’s trading, closing at 1.09029. Today, the EURUSD surged to 1.09802 in response to the EU’s plans to engage in negotiations with the United States.
If the EU’s ‘zero for zero’ import tariff proposal is well-received by Trump, it will likely provide additional positive sentiment for the EURUSD exchange rate.
GBPUSD
The GBPUSD pair tumbled by nearly 1,800 points (180 pips) to 1.27203 during trading on Monday, reaching its lowest point in a month. Market participants are increasingly concerned that the global economic slowdown may compel the Bank of England (BoE) to cut interest rates more aggressively this year.
However, the prospect of a trade agreement between the EU and the U.S. offers a glimmer of hope and positivity for the GBPUSD.
USDJPY
The USDJPY currency pair climbed by 1.182 points (118.2 pips) to 148.149 during trading on Monday, displaying significant volatility. Both the U.S. Dollar and the Japanese Yen are seen as safe-haven currencies, contributing to their erratic movements.
Given the current conditions, USDJPY is likely to continue experiencing volatility, exhibiting a downward tendency following the sharp rise observed yesterday.
Nasdaq
The Nasdaq index successfully recorded an increase of 136 points, rising to 17,628 during Monday’s trading session after experiencing a drop to its lowest level in 15 months at 16,479.
The rebound in shares of major technology companies bolstered the Nasdaq’s performance. Additionally, the EU’s planned ‘zero for zero’ tariff proposal to the U.S. contributes to the positive sentiment surrounding the index.
