Global markets got a boost after President Trump announced a 90-day pause on US tariffs for non-retaliatory countries, lifting sentiment and sparking a surge in risk assets. US equities posted their biggest daily gain since the early 2000s, despite 125% tariffs on China. The risk-on wave lifted major currencies, commodities, and crypto. At the same time, the US Dollar Index (DXY) remained under pressure amid doubts over long-term growth and cautious Fed commentary from the FOMC Minutes.
Despite soft Chinese inflation data and Beijing’s firm stance on trade, markets held onto their upbeat tone early Thursday. Sentiment got an extra boost after ASEAN nations pledged not to retaliate against US tariffs, easing fears of a broader trade war. However, traders remained cautious ahead of key US CPI data. The dollar stayed soft, helping EURUSD and GBPUSD bulls, as well as the USDJPY sellers, while AUDUSD, NZDUSD, and USDCAD tried to hold their ground. Further, gold pushed higher, but oil and crypto trimmed gains.
Trump’s tariff pause gave Euro traders a brief lift, but EUR/USD bulls faced headwinds as European policymakers voiced concerns over a potential trade war and ongoing economic uncertainty. Adding pressure, ECB officials signaled a preference for lower rates, while fresh recession worries across the Eurozone further dampened sentiment, especially ahead of today’s crucial US CPI release.
GBPUSD rose for the third straight day, shrugging off the weakest UK housing demand in 19 months. Optimism over improved UK-US relations and the prospect of lower tariffs for Britain helped support the Pound. Additionally, Bank of England officials easing recession concerns gave GBP further strength.
Meanwhile, USDJPY pulled back after yesterday’s rebound from a six-month low, amid upbeat Japanese PPI data fueling hawkish expectations for the Bank of Japan. Japan’s willingness to engage in trade-positive talks with the US also pressured the Yen.
AUDUSD and NZDUSD gained slightly after a strong rally, but both currencies struggled due to China-related concerns and broad market optimism from the shift in US tariffs. While Australia and New Zealand pushed for trade deals with Europe and the UK, dovish stances from the RBA and RBNZ created uncertainty for traders.
Meanwhile, USDCAD held lower after its biggest drop since January 2023. A pullback in crude oil, Canada's key export, offered downside filters for the Loonie pair, along with concerns over US-Canada trade relations. The BoC's readiness for rate cuts and Canada's bleak economic outlook further challenged USDCAD sellers.
Gold is benefiting from broad market optimism over US tariffs, a weaker US Dollar, and mixed concerns about the US-China trade war. The precious metal is also supported by strong demand from China and a bullish technical setup, defending its early-week rebound from a four-month support level.
Meanwhile, WTI crude oil struggles to maintain its rebound from a four-year low due to growing uncertainty about energy demand amid US tariffs and OPEC+ supply concerns. Additional pressure comes from a higher US inventory build and a cautious market ahead of today’s US CPI data.
Trump’s tariff pause and Paul Atkins’ appointment as SEC Chair helped support a rebound in Bitcoin (BTCUSD) and Ethereum (ETHUSD). However, industry caution, weak on-chain data, and ETF outflows are weighing on crypto bulls. Additionally, a cautious mood ahead of US inflation data is also limiting gains for Bitcoin and Ethereum.
Trump’s tariff retreat overshadowed Wednesday’s FOMC Minutes, but market players are now focused on the US March CPI for clearer direction. Central bank speeches from Europe, the UK, and the US will also keep intraday traders busy.
A softer US inflation print could put more pressure on the US Dollar and fuel broad market optimism, boosting demand for risk assets. This could benefit EUR, GBP, and JPY buyers, while AUD, NZD, and CAD bulls may struggle due to their ties with China. Gold is likely to remain strong, while crude oil bears could return. Cryptocurrencies and equities are expected to consolidate their recent gains.
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