Trading conditions have been particularly volatile over the past 24 hours, as conflicting market sentiment reflects deepening uncertainty around the ongoing US-China trade war.
While some participants held out hope for a diplomatic breakthrough that might see tariffs removed, others feared a further escalation — fears that were quickly realised.
US Strikes Back with 104% Tariffs
Overnight, the US implemented reciprocal tariffs on Chinese imports, including an eye-watering 104% duty, reinforcing the narrative that tensions between the world’s two largest economies are far from easing.
This aggressive move not only fuels further economic uncertainty but also threatens to disrupt global supply chains and drag on investor confidence worldwide.
Mixed Fortunes in Currency Markets
The euro was under pressure throughout much of yesterday, but found a slightly firmer tone overnight. Meanwhile, the US dollar staged a modest recovery during the European session — only to sell off again overnight, reflecting the heightened volatility gripping FX markets.
With investor sentiment swinging on every headline, currency movements are likely to remain sensitive to trade news and geopolitical developments.
Fed Minutes in Focus
Today’s spotlight turns to the latest Federal Reserve meeting minutes, which could shed light on how US policymakers are reacting to the trade-driven economic outlook.
Beyond that, the data calendar is notably quiet on both sides of the Atlantic, meaning tariff-related headlines will continue to dominate market direction.
Navigating Turbulent Markets
With currency markets in flux and the macro outlook clouded by political risk, it’s critical for businesses to stay informed and agile. Our team at Qumoney can help you manage exposure, mitigate risk, and take advantage of timely market opportunities.
Speak to our experts today for tailored FX strategies and insights that help you stay ahead.