Forex Today: Tariff fears lift Gold to new record peak
Here is what you need to know on Monday, March 31:
Gold benefits from safe-haven flows amid growing tariff fears at the beginning of the week and trades at a new all-time high above $3,120. The European economic calendar will feature preliminary March inflation data from Germany. In the second half of the day, markets will pay close attention to trade-war headlines and geopolitical developments.
US President Donald Trump's advisers are considering imposing global tariffs of up to 20% on all imports into the US, the Wall Street Journal reported over the weekend. The Trump administration is expected to share the details of its new tariff agenda on Wednesday. Additionally, Trump said on Sunday that if he feels that Moscow is trying to block his attempts to end the war in Ukraine, he would impose secondary tariffs of 25%-50% on buyers of Russian oil. Reflecting the risk-averse market environment, US stock index futures were last seen losing between 0.4% and 1.2%. Meanwhile, the US Dollar (USD) Index trades marginally lower on the day below 104.00 in the European morning. The Federal Reserve Bank of Dallas' regional manufacturing survey and Chicago Purchasing Managers' Index data for March will be published in the second half of the day.
US Dollar PRICE Last 7 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.34% | -0.33% | -0.22% | -0.16% | 0.37% | -0.43% | |
| EUR | 0.12% | -0.34% | -0.74% | -0.07% | -0.06% | 0.54% | -0.29% | |
| GBP | 0.34% | 0.34% | 0.02% | -0.35% | 0.25% | 0.89% | -0.06% | |
| JPY | 0.33% | 0.74% | -0.02% | 0.10% | 0.14% | 0.72% | -0.14% | |
| CAD | 0.22% | 0.07% | 0.35% | -0.10% | 0.12% | 0.60% | -0.23% | |
| AUD | 0.16% | 0.06% | -0.25% | -0.14% | -0.12% | 0.61% | -0.22% | |
| NZD | -0.37% | -0.54% | -0.89% | -0.72% | -0.60% | -0.61% | -0.76% | |
| CHF | 0.43% | 0.29% | 0.06% | 0.14% | 0.23% | 0.22% | 0.76% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Following Friday's sharp decline, USD/JPY stays under bearish pressure on Monday and loses more than 0.6% on the day below 149.00. In the Asian session on Tuesday, Japan's Ministry of Health, Labor and Welfare will release the Unemployment Rate data for February.
Following a six-day decline, EUR/USD gained traction and registered gains on Thursday and Friday to end the previous week on a firm footing. The pair stays relatively quiet and fluctuates above 1.0800 in the European morning. The data from Germany showed earlier in the day that Retail Sales increased by 0.8% on a monthly basis in February, coming in better than the market expectation for a no change.
GBP/USD closed the previous week marginally higher despite struggling to build on Thursday's gains. The pair holds its ground to start the European session and trades above 1.2950.
AUD/USD struggles to gain traction on Monday and trades below 0.6300. In the Asian session on Tuesday, the Reserve Bank of Australia (RBA) will announce monetary policy decisions. Markets expect the RBA to leave the policy rate unchanged at 4.1%.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
