US President Trump's imposition of new tariffs on Canada, Mexico, and China has sent shockwaves through global markets. The move has strengthened the Dollar Index, weakened the Euro, and spurred volatility in various currency pairs, including USDJPY, EURJPY, AUDUSD, and the Pound. Meanwhile, US Treasury yields have experienced slight declines, while key stock indices like the Dow Jones, DAX, and Nifty have shown mixed movements.
US President Donald Trump implemented new tariffs on Canada, Mexico, and China, effective Tuesday. These tariffs impose a 25% rate on Canadian and Mexican imports, along with a 10% rate on Canadian energy products and Chinese goods. This action spurred a strengthening of the Dollar Index , pushing it past 109, and caused the Euro to fall below 1.03. If the Dollar Index continues to rise, it could potentially test levels of 110-111 before peaking.
Such a scenario would leave the Euro vulnerable to a decline towards 1.01 or even 1.00. The EURINR pair is expected to trade within a broad range of 91-89 until a decisive break occurs. USDJPY needs to surpass 156 to regain bullish momentum. EURJPY, AUDUSD, and the Pound have fallen below the lower ends of their respective ranges (164-160, 0.63-0.62, and 1.26-1.24), suggesting potential tests of targets at 157-156, 0.60, and 1.22 respectively. USDCNY is closed today, while USDINR on the NDF is currently trading higher. If the spot opens higher in the onshore markets, a test of 87 could happen sooner than anticipated. US 10Yr and 30Yr yields have experienced a slight decline. Key support levels for the 10Yr are at 4.5%-4.4%, and for the 30Yr, they are at 4.37%-4.6%. As long as these supports hold, the 10Yr yield could rise toward 5.0%, and the 30Yr yield may target 5.2% in the medium term. German yields have fallen as predicted and remain bearish in the near term. The 10Yr GoI appears to be ranging for a while before a potential rise. The Dow Jones has turned lower, maintaining the range of 41850-45100. As long as it stays above 44500, it could rise to 45250. DAX reached a high of 21800.52 and, above 21700, could extend its rise towards 21900 before a reversal. Nifty attempted a rise to 23700 but failed to sustain it and closed above 23400. If it stays above 23400, a rise towards 23700-23800 seems possible. Nikkei has plunged by 2.5%, falling to 38600. It could further decline to test support at 38000-37800. Crude prices are holding above key support levels, with potential for a rise towards $78-79 (Brent) and $75-76 (WTI). However, a break below support could lead to further declines. Gold has encountered resistance near $2850, with a possible short-term drop to $2800-2750 before a rebound towards $2900 occurs. Silver has dropped slightly, with support around $31.5. The bullish outlook towards $33.0-33.5 seems likely in the near term. Copper and Natural Gas remain bearish towards $4.1 and $3.0-2.8 respectively for the coming weeks
Tariffs Dollar Index Euro USDJPY EURJPY AUDUSD Pound US Treasury Yields Dow Jones DAX Nifty Global Markets Market Volatility
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