US Dollar recovers as tariff uncertainty sparks safe-haven demand
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Daily Currency Update
The US dollar edged higher this morning against a basket of currencies, recovering from a two-month low, as safe-haven demand picked up following President Donald Trump’s reaffirmation that tariffs on Mexico and Canada will proceed as planned.Trump’s remarks on Monday—stating that tariffs remain "on time and on schedule" despite border security efforts—heightened trade uncertainty, fuelling cautious sentiment in FX markets. The renewed tariff threat adds to concerns over North American trade flows, keeping traders on edge and providing near-term support for the dollar.
Key Movers
The euro started the day lower against the US dollar, surrendering most of its post-election gains as political uncertainty took centre stage. While Germany’s conservative CDU/CSU bloc secured victory, prolonged coalition negotiations - most likely with the SPD - could delay economic policy clarity, keeping investors on edge.FX markets are now focused on the new government’s approach to reviving Europe’s largest economy, with key questions around fiscal stimulus, energy cost reductions, and infrastructure investment. Any signs of prolonged deadlock could limit euro upside, while decisive policy moves may offer support.
Expected Ranges
- GBP/USD: 1.2585 - 1.2665 ▲
- GBP/EUR: 1.2025 - 1.2095 ▲
- GBP/AUD: 1.9875 - 1.9975 ▲
- EUR/USD: 1.0415 - 1.0695 ▲