The forex market exhibited relative stability at the beginning of the European trading session on Wednesday (April 2, 2025). However, movements in Gold and Nasdaq showed significant volatility, indicating that market participants are eagerly awaiting President Donald Trump’s reciprocal policy, set to take effect today. This policy will result in increased import tariffs for countries that impose tariffs on goods imported from the United States.
Trump dubbed this policy as the “biggest ever” and stated it will “begin with all countries.” Traders are anticipating further details regarding this policy, which could trigger heightened volatility once it is announced later today in the U.S.
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In addition to the specifics of this policy, the release of the U.S. ADP employment data at 19:15 WIB is expected to be a market mover. Forecasts from Trading Central suggest that March’s employment increase will be about 60,000, which is lower than the previous month’s figure of 77,000.
GOLD
Gold prices (XAUUSD) rose at the start of the European trading session, approaching the daily high of $3,135.57 per troy ounce. This movement indicates that traders are preparing for Trump’s reciprocal policy, which could potentially escalate into a larger trade war.
Market sentiment for Gold could become even more favorable if ADP data is released showing a job growth number below the forecast of 60,000.
OIL
Oil prices (CLS10) fell at the start of the European trading session, reaching a daily low of $70.66 per barrel. The drop in oil is attributed to the potential implications of Trump’s reciprocal policy, which may trigger a larger trade war and hinder economic growth. These conditions could lead to decreased oil demand, creating negative sentiment.
Negative sentiment towards oil could intensify if the ADP report indicates lower employment figures than forecasted, signaling weakness in the U.S. labor market and the economy.
EURUSD
EURUSD displayed volatility within the range of 1.07803 – 1.08084 at the onset of the European session, indicating that traders are waiting for clarity on the reciprocal policy.
If this policy significantly raises tariffs on EU imports, EURUSD could face downward pressure.
GBPUSD
GBPUSD also experienced volatility at the start of the European session, leaning towards upward movement. Traders are keen to see if Trump’s reciprocal policy will affect the UK.
Previously, there were indications that the U.S. and the UK would reach a trade agreement, potentially avoiding a trade war. However, if Trump targets increased tariffs on UK goods, GBPUSD may suffer.
USDJPY
USDJPY reversed to 149.314 after initially rising close to the 150 mark. The sentiment surrounding the reciprocal policy led to fluctuations between these two safe-haven assets.
This policy could also dampen economic growth in the U.S., thus placing downward pressure on USDJPY.
Nasdaq
Nasdaq dropped to 19,453 at the beginning of the European trading session, down 144 index points from the previous Tuesday’s closing. As mentioned in the earlier Macro Overview, negative sentiment will likely continue to weigh on Nasdaq until details of the reciprocal policy are revealed.
If it turns out that this policy targets all countries with significant tariff increases, Nasdaq could see increasingly bearish sentiment.
