USD gains as Trump’s tariff hikes fuel trade war concerns
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Daily Currency Update
The US dollar has started the day on the up after President Donald Trump announced tariff increases on steel and aluminium imports, sparking renewed concerns over global trade tensions.A White House official confirmed that the 25% tariffs will take effect on March 4, with Trump also signalling plans to impose reciprocal tariffs on other countries in the coming days.
The FX market reacted swiftly, with investors moving toward safe-haven assets, supporting the USD against major peers. The tariff escalation adds to inflationary pressures, reinforcing the Federal Reserve’s cautious stance on rate cuts and further influencing FX market dynamics.
Key Movers
European Central Bank President, Christine Lagarde, assured lawmakers that inflation is on track to return to the 2% target this year, with risks appearing balanced. However, ongoing trade frictions, particularly concerns over potential US tariffs, have cast uncertainty over the eurozone’s economic outlook.German Chancellor, Olaf Scholz, warned that the European Union is prepared to retaliate if the U.S. moves forward with new trade levies, raising the risk of escalating tensions that could weigh on the euro. Traders remain cautious as uncertainty over tariffs could drive volatility in EUR/USD.
Expected Ranges
- GBP/USD: 1.2285 - 1.2375 ▼
- GBP/EUR: 1.1945 - 1.2035 ▲
- GBP/AUD: 1.9605 - 1.9695 ▼
- EUR/USD: 1.0245 - 1.0325 ▼