Market momentum is low early Wednesday as traders await US President Trump’s key “Liberation Day” tariff announcements. Tension rises due to mixed signals from White House officials about tariffs and the US ADP Employment Change report, which signals Friday’s Nonfarm Payrolls (NFP). Additionally, speeches from top ECB officials add to market uncertainty.
Recent US economic data, including weak PMI reports, job openings, and GDP forecasts, have weighed on market sentiment. While Fed officials provided no clear direction, they dismissed concerns about a recession tied to tariffs. Meanwhile, China’s new guidelines to support tech innovation, along with fewer negative headlines about Russia and Iran, helped ease some risk aversion in the markets.
Against this backdrop, the US Dollar Index (DXY) is steady after two consecutive daily gains, while Gold reverses a previous pullback from a record top.
EURUSD remains under pressure, and GBPUSD fluctuates within a month-long range. USDJPY, AUDUSD, and NZDUSD show slight gains, while USDCAD consolidates its recent sharp drop. Crude Oil remains stable after retreating from a five-week high, and Bitcoin and Ethereum end their two-day rally. Equities show mild gains after earlier losses.
Although the US Dollar lacks strong upside momentum, EURUSD remains under pressure due to political uncertainty in France and dovish comments from ECB policymakers. Fears of a recession in the Eurozone, worsened by US tariffs and sluggish EU inflation, also weigh on the pair.
On the other hand, USDJPY reverses the previous day’s losses as Bank of Japan Governor Kazuo Ueda expressed concerns about trade and inflation risks from US tariffs. Additionally, mixed employment and activity data from Japan, along with market consolidation ahead of key announcements, also support the Yen pair.
GBPUSD posts mild losses, reversing Tuesday’s corrective bounce while staying within its month-old trading range, as the British Pound (GBP) struggles to justify the Bank of England’s (BoE) optimism amid mixed economic data and ongoing UK-US trade tensions. Additionally, geopolitical uncertainties in Britain and skepticism over the new government’s ability to counter recession fears, especially after the unimpressive Spring Budget, further weigh on the Sterling’s momentum.
AUDUSD and NZDUSD extend Tuesday’s run-up, while USDCAD holds lower ground following a downbeat trading day, as commodity-linked currencies benefit from China’s stimulus announcements. Additionally, traders' anticipation of today’s US tariff updates supports the Antipodeans. AUDUSD also finds strength in improved Aussie Building Permits data and hawkish comments from RBA Assistant Governor Christopher Kent. In contrast, softer New Zealand Building Permits fail to slow NZDUSD’s advances amid cautious market optimism. Meanwhile, USDCAD struggles to maintain bearish momentum as crude oil—Canada’s key export—stabilizes after retreating from a more than one-month high, while worsening US-Canada trade relations add to market concerns.
Market uncertainty and a sluggish US Dollar keep Gold buyers optimistic about another record high, despite the previous day's retreat from a four-month-old resistance line within a bullish channel. The precious metal also finds support from strong expectations of physical demand from Asia and major central banks.
Meanwhile, Crude Oil remains defensive after pulling back from a five-week high, as an unexpected build in weekly oil inventories, according to industry reports, adds pressure. Additionally, concerns that OPEC+ will stick to its planned supply increase from April, along with Trump’s push for higher output and fewer supply crunch headlines from the Middle East, weigh on the energy market. Fears of weaker demand due to Trump’s tariff policies further challenge the oil buyers.
Bitcoin (BTCUSD) and Ethereum (ETHUSD) snap two-day winning streak as cautious mood on “Liberation Day” joins news that the US lawmakers resist yield-bearing on stablecoins. In doing so, the cryptocurrencies ignore the headline suggesting the UK trade bodies’ request to the government to make crypto a ‘strategic priority’.
US President Donald Trump will take center stage in the markets as he announces tariff plans at 20:00 GMT. Recently, the Republican leader has softened his stance on trade, hinting at possible favorable terms through negotiations. If confirmed, this could boost market optimism, weigh on the US Dollar, and support Gold, crude oil, and commodity-linked currencies. Meanwhile, EURUSD, GBPUSD, and USDJPY may trade sideways unless specific trade relief measures for Europe, the UK, or Japan emerge, which is unlikely. Further, cryptocurrencies and equities might recover if the White House takes a softer stance on tariffs, but could tumble if Trump adopts a harsh tone.
Beyond Trump’s speech, key events such as the US ADP Employment Change, weekly oil inventory data, and remarks from ECB President Christine Lagarde, Chief Economist Philip Lane, and policymaker Olli Rehn will also shape intraday market movements.
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