US President Donald Trump announced a new round of tariffs on Thursday, this time targeting top-tier economies like Europe and Canada, after already hitting Japan earlier in the week. The increased tariff rates—now ranging from 15% to 20%, depending on trade deals signed before August 1—have raised concerns about global growth and inflation, prompting countries to meet US demands despite internal challenges.
Adding to tensions, Trump is supporting arms sales to allies that send weapons to Ukraine, heightening Russia’s opposition and threatening peace efforts. Meanwhile, a fragile Israel-Iran ceasefire is at risk after Israel attacked Yemen and Iran defended its nuclear program.
This mix of geopolitical risks and economic strain has soured market sentiment. Combined with softer US jobless claims and slightly hawkish Fed minutes, these factors have helped the US Dollar recover, pressuring major currencies and commodity-linked peers, such as the Antipodeans.
However, gold extended its recovery for a third day, trimming weekly losses, while crude oil is set for a second weekly gain despite Thursday’s drop. Cryptocurrencies rallied sharply, with Bitcoin hitting a new all-time high, suggesting investors are turning to digital assets as safe havens. Equities edged higher, bond yields slipped, and USDJPY reversed a two-day slide with a strong rebound.
The US Dollar stays firm, pressuring EURUSD lower for the third day and setting it up for its first weekly loss in three. The drop is driven by weak EU data and renewed trade concerns, as Trump prepares to release a new tariff letter targeting the EU on Friday. The move could hit the bloc’s auto sector hard, trigger retaliation, and escalate trade tensions.
In the UK, rising fiscal worries and political uncertainty, alongside mixed manufacturing, GDP, and trade data, are dragging GBPUSD lower, putting it on track for a two-week losing streak.
USDJPY, on the other hand, is heading for its biggest weekly gain of 2025 after rebounding from a two-day dip. The rally comes amid doubts over the Bank of Japan’s rate hike outlook, with US trade policies adding pressure to Japan’s inflation and growth outlook. Earlier this week, Washington pushed Japan toward 25% tariffs despite resistance and ongoing talks.
The uncertain market mood, along with a stronger US Dollar and falling crude oil prices, challenges the recent uptrend in AUDUSD and NZDUSD. Both pairs had risen for three days on optimism over potential China stimulus, hopes for a US-China trade deal, and early-week inaction from the Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ).
Despite current headwinds, AUDUSD is still set for a third straight weekly gain, while NZDUSD appears headed for its first weekly loss in three.
Meanwhile, USDCAD is on track for its first weekly gain in three, as the Canadian Dollar weakened after Trump threatened 35% tariffs on Canada—excluding USMCA goods—if no deal is reached with Washington. A sharp drop in crude oil prices on Thursday—a key Canadian export—also added pressure on the CAD.
Gold rises for the third straight day, defying a stronger US Dollar, as investors seek safety amid market uncertainty. Supporting the uptrend is a rebound from a five-month support level and fresh data from the World Gold Council (WGC), highlighting strong demand from ETFs, central banks, and physical buyers in Asia.
However, the recovery remains slow, and prices are still close to key support—any break below it could trigger long-awaited profit-taking.
Crude oil saw its biggest daily drop in two weeks on Thursday, pressured by a stronger US Dollar and rising fears that US tariffs could slow global growth. Additional pressure came from reports of heavy Saudi oil exports to China and the EU’s plan to cap Russian oil prices through sanctions. Still, oil remains on track for a second straight weekly gain.
In contrast, cryptocurrencies surged sharply despite the firm US Dollar. The rally was driven by technical breakouts, rising institutional interest, and growing belief in crypto as a new safe-haven asset. Bullish on-chain signals also supported the move. Bitcoin (BTCUSD) hit a fresh all-time high near $118K, Ethereum (ETHUSD) jumped to its highest since early February, and lesser-known tokens like Hyperlane soared nearly 400% in a single day.
While Canada’s monthly jobs report will headline Friday’s economic calendar, broader market direction will likely hinge on geopolitical risks. Key focus areas include Trump’s new tariffs and developments involving Ukraine, China, and Iran, all of which are fueling global tensions and could further strengthen the US Dollar.
A stronger USD may pressure major currencies, Antipodeans, and crude oil. Gold may react mixed due to its safe-haven role, but if the Dollar strengthens too much, XAUUSD could break below its key support at $3,289, possibly triggering a long-awaited correction.
May the trading luck be with you!
