Investors panicked in response to Gary Cohn’s unexpected – although not entirely surprising – announcement that he’s resigning from his post as Donald Trump’s top economic adviser late in the day yesterday. Although things have calmed down slightly, US index futures still remained deep in the red while the Canadian dollar was also struggling at the time of this writing. The market’s reaction suggests investors are now even more concerned that with one of Trump administration’s strongest free trade advocates gone, that the US trade policy will head further into protectionist territory. Investors are wondering how Cohn’s resignation will impact US trade policies and whether it will ignite a trade war, and what that may mean for monetary policy. Will Donald Trump now enact those hefty tariffs on steel and aluminium imports? How will the Federal Reserve respond? After all, the Fed dislikes market volatility, something which will surely increase further in the event other countries start to retaliate and introduce their own protectionist policies. If the Fed becomes hesitant in tightening monetary policy amid trade war concerns, this could put further downward pressure on the dollar, especially against its European rivals and perceived safe haven currencies such as the Japanese yen and Swiss franc. Meanwhile the Canadian dollar and Mexican peso could fall further out of favour as import of commodities by US companies declines as a result of the tariffs. However, a lot will now depend on who Trump chooses to replace Cohn. If his replacement is someone deemed to be in favour of free trade, much like Cohn, then that should be a market-friendly outcome. However if it is a trade hawk then panic is only likely to increase among market participants. Anything is possible with Donald Trump.
Trading leveraged products such as FX, CFDs and Spread Bets carry a high level of risk which means you could lose your capital and is therefore not suitable for all investors. All of this website’s contents and information provided by Fawad Razaqzada elsewhere, such as on telegram and other social channels, including news, opinions, market analyses, trade ideas, trade signals or other information are solely provided as general market commentary and do not constitute a recommendation or investment advice. Please ensure you fully understand the risks involved by reading our disclaimer, terms and policies.
Recommended Content
Editors’ Picks

EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.

GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.

Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.

Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.

Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.