Trump ramps up global tariff drive
US President Donald Trump ramped up his tariff threats directed at the European Union while announcing plans to communicate with the leaders of Canada and Mexico. This escalation coincided with a decline in stock markets following a tumultuous weekend that signaled the potential onset of a trade war.
Speaking to reporters on Sunday night, Trump revealed that he would have separate discussions on Monday morning with Canadian Prime Minister Justin Trudeau and Mexican officials after declaring his intention to impose 25% tariffs on the US’s neighboring countries and top trading partners. These tariffs are expected to be implemented on Tuesday unless an urgent agreement is reached.
“I don’t anticipate anything very dramatic,” Trump remarked about the forthcoming calls. “We have imposed tariffs. They owe us a significant amount of money, and I’m confident they will pay up.”
Trump also reiterated his warning to the European Union that tariffs “will definitely take effect,” highlighting the considerable trade deficit with that bloc.
“They don’t import our cars; they don’t import our agricultural products,” Trump commented regarding the EU. “They take almost nothing, while we import everything, including millions of cars and substantial quantities of food and farm goods.”
Trump’s statements suggest a limited chance for reaching an agreement to avert a North American trade conflict that might expand to a global scale. As a result, US stock futures and Asian markets experienced declines, the peso fell to its lowest point against the dollar in almost three years, and the Canadian dollar weakened to its lowest level since 2003. Following Trump’s renewed threats, the euro fell while the dollar gained strength.
DXY surpasses 109 once again
The dollar surged while stocks declined as the onset of US tariffs sparked a trade war that threatens economic growth worldwide. The index is currently trading at 109.40 after reaching a peak of 109.90 during the European session, which is close to this year’s high of 109.95 recorded in January.
Meanwhile, the newly imposed tariffs offer renewed hope for dollar bulls. However, technical indicators are heavily overbought, suggesting limited upward potential. Traders should pay attention to how the dollar reacts after the NYSE opening bell today.
Euro under 1.0250
The EURUSD pair has declined to a new low of 1.0150 but has recovered slightly to around 1.0240 during the Asian session. This decline suggests that further weakness may follow, especially as tensions rise with Trump threatening Europe with tariffs.
Traders should closely monitor the support area at 1.0220. If the price breaks through this level, it could lead to further declines and potentially retest the Asian session lows near 1.0150.
Gold dump & pump
Gold fell to a low of $2,772 earlier this morning but managed to recover, closing near $2,800 by the end of Friday. Silver experienced similar volatility, dropping to around $30.70 before bouncing back to $31.30. This high level of volatility is likely to continue due to Trump’s inflationary policies, which could potentially lead to significant changes in the central banks’ strategies amid the current easing cycle.
Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.
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