Home Daily Commentaries Volatility abounds and investors in turmoil as US tariff agenda continues to reverberate across financial markets

Volatility abounds and investors in turmoil as US tariff agenda continues to reverberate across financial markets

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Tuesday 8 April, 2025

Daily Currency Update

Volatility and turmoil surged through trade on Monday as markets remain hostage to tariff headlines. Having plunged more than 5% on Friday, the AUD extended losses through open on Monday, marking fresh 5-year lows just above US$0.5950. With Asian markets on the back foot, the AUD remained under pressure through the domestic session and appeared poised to break below US$0.5950 overnight, before reports emerged suggesting President Trump was considering a 90-day pause on tariffs for all countries except China.

The AUD surged, punching back above US$0.60, marking session highs just south of US$0.61, before the White House quickly released a statement denigrating the reports, labelling them “fake news”. The AUD quickly unwound gains, tracking back below US$0.60. Equities and risk assets remain under pressure amid risk off trading conditions as President Trump appears intent on staying the course, suggesting the massive declines seen across stocks and elevated recession fears were the tonic needed to fix the US’s broken trading backdrop.

The AUD remains a prisoner to tariff headlines at this point and the whipping boy among growing global growth concerns. Losses haven’t been contained to the USD, with the AUD markedly lower against the euro, GBP, yen, NZD and CAD as concern for China’s economy and sharp declines across industrial metal prices weighed disproportionately on the AUD.

Key Movers

Price action remained elevated on Monday and markets looked to haven currencies amid the uncertainty and turmoil that is the US tariff agenda. The USD DXY index surged, up 0.5%, as risk-correlated and commodity-linked currencies continued their move lower. The dollar enjoyed support on haven plays, while the yen, Swiss franc and euro all edged upward as markets sought to divest of risk.

The euro has found support in haven plays, bolstered by Europe’s 1 trillion euro fiscal pivot in March. Having tested a break below 1.09 on open yesterday, the currency pushed back toward intraday highs north of 1.1025, before settling near 1.0930. Markets remain at the mercy of tariff headlines, with President Trump steadfastly committed to the US tariff agenda.

Tensions with China escalated further on Monday, with President Trump responding to China’s retaliatory measures, suggesting a further 50% tariff on Chinese goods will be imposed on April 9 unless China removes its 34% retaliatory tariff.

With a near 70% tariff now imposed on Chinese exports, and with the US economy effectively shut-off, the threat of further tariffs is somewhat empty. At some point the tariff rate becomes irrelevant. That said, it does speak to the climate of the moment, and with the US pushing hard on all trading partners, we can expect uncertainty and volatility will remain elevated through the near term.

Expected Ranges

  • AUD/USD: 0.5900 - 0.6100 ▼
  • AUD/EUR: 0.5380 - 0.5620 ▼
  • GBP/AUD: 2.0800 - 2.1600 ▼
  • AUD/NZD: 1.0700 - 1.0900 ▼
  • AUD/CAD: 0.8400 - 0.8700 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

View previous day