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Currency markets are reacting to renewed trade tensions as tariff uncertainty pressures the US Dollar and lifts major counterparts. Reports that the EU may freeze approval of a US trade deal, alongside China’s call for Washington to remove unilateral tariffs, have reignited concerns over global trade stability. The shifting tone has supported risk-sensitive currencies, with the Australian Dollar and Canadian Dollar advancing, while the Pound Sterling strengthens above 1.3500 amid broad-based USD softness. Markets are recalibrating expectations as geopolitical trade risks re-enter the spotlight.
EUR/USD finds support as reports suggest the EU may freeze approval of a US trade deal amid renewed tariff threats. Trade uncertainty is weighing on the US Dollar, providing the Euro with a modest tailwind.
Geopolitical Risks: Rising trade tensions between the US and EU boost demand for non-USD currencies.
US Economic Data: Softening USD sentiment offsets recent macro resilience.
EU Trade Policy: Potential freeze of trade deal approval signals diplomatic strain.
China-US Relations: Beijing’s call to lift unilateral tariffs adds to global uncertainty.
Monetary Policy: ECB-Fed divergence remains secondary to trade-driven flows.
Trend: Mild bullish recovery.
Resistance: 1.1880
Support: 1.1780
Forecast: Upside bias persists while tariff uncertainty pressures the Dollar.
Market Sentiment: Constructive on EUR.
Catalysts: Trade headlines, US macro data, yield spreads.
AUD/USD extends gains as tariff uncertainty weighs on the US Dollar, supporting risk-sensitive currencies.
Geopolitical Risks: Trade tensions weaken USD sentiment.
US Economic Data: Dollar softness offsets domestic AUD headwinds.
China Relations: Trade developments remain crucial for the Aussie.
Commodity Prices: Stable resource demand underpins sentiment.
Monetary Policy: RBA-Fed expectations remain in the background.
Trend: Bullish correction.
Resistance: 0.7180
Support: 0.7080
Forecast: Further upside possible if trade tensions continue to pressure the USD.
Market Sentiment: Risk-on, USD-negative.
Catalysts: Trade negotiations, US data releases, China headlines.
GBP/USD trades above 1.3500 as Sterling gathers strength amid tariff confusion and broad US Dollar weakness.
Geopolitical Risks: Trade-related uncertainty dampens USD demand.
UK Economic Data: Domestic outlook remains stable but secondary.
US Economic Data: Dollar weakness supports the pair.
Trade Policy: EU-US tensions contribute to broader USD softness.
Monetary Policy: BoE-Fed divergence remains a structural theme.
Trend: Short-term bullish recovery.
Resistance: 1.3580
Support: 1.3450
Forecast: Gains may extend if tariff rhetoric escalates further.
Market Sentiment: Constructive Sterling bias.
Catalysts: Trade developments, US macro data, UK releases.
USD/CAD drifts lower below 1.3650 as tariff uncertainty pressures the US Dollar and higher crude oil prices support the Canadian Dollar.
Geopolitical Risks: Trade tensions weigh on USD sentiment.
Oil Prices: Firmer crude underpins CAD strength.
US Economic Data: Mixed signals limit USD recovery attempts.
Trade Policy: North American trade stability contrasts with broader US tensions.
Monetary Policy: Fed-BoC expectations influence medium-term direction.
Trend: Bearish bias.
Resistance: 1.3720
Support: 1.3580
Forecast: Downside risks remain while oil stays firm and USD sentiment weakens.
Market Sentiment: CAD-positive tone.
Catalysts: Oil prices, trade headlines, US macro releases.
USD/CNH faces mild pressure as China’s Commerce Ministry urges the US to lift unilateral tariffs, adding to trade-driven Dollar softness.
Geopolitical Risks: Escalating tariff rhetoric increases FX volatility.
China Policy Signals: Official stance supports Yuan stability.
US Economic Data: Dollar softness dominates near-term flows.
Trade Policy: Central theme driving currency adjustments.
Monetary Policy: PBoC stance remains supportive of controlled currency moves.
Trend: Slight bearish bias for USD.
Resistance: 7.2400
Support: 7.1800
Forecast: Further downside possible if trade tensions intensify and USD remains under pressure.
Market Sentiment: Cautiously USD-negative.
Catalysts: US-China trade headlines, policy statements, broader risk sentiment.
With tariff rhetoric resurfacing, FX markets are likely to remain sensitive to further trade-related headlines. Any escalation could deepen Dollar weakness and fuel gains in major and commodity-linked currencies, while signs of de-escalation may restore USD stability. As geopolitical uncertainty blends with macro positioning, volatility across currency markets may persist in the near term.
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