Morning Market Review for 03.04.2025

EUR/USD

The European currency is showing a significant growth in the EUR/USD pair during the Asian session, developing a strong "bullish" momentum formed the day before. The instrument is testing 1.0950 for a breakout, updating local highs from March 18. The euro is receiving significant support from the fall of the American currency amid the introduction of new import duties by the United States. The basic minimum duty is set at 10.0%, and "reciprocal" measures will be applied against all countries where any restrictions exist, at a rate half that amount: as an example, the head of the White House cited the EU, where, according to him, taxes are in effect at a rate of 39.0%, so the retaliatory duty introduced by the US will be at the level of 20.0%. For goods from China, it will be 34.0%, Taiwan — 32.0%, Switzerland — 31.0%, Great Britain — 10.0%. Now traders are expecting retaliatory measures, including those already announced by the EU. Meanwhile, the US currency received moderate support the day before from data on the dynamics of employment in the private sector: the March report from Automatic Data Processing (ADP) showed a rise of 155.0 thousand, following an increase of 84.0 thousand in the previous month, while analysts had expected a rise of 105.0 thousand. On Friday, at 14:30 (GMT+2), the US will present the final March data on the labor market, which could significantly affect the dynamics of the American currency: forecasts suggest the national economy will add about 140.0 thousand new nonfarm jobs after 151.0 thousand in February, Average Hourly Earnings will slow to 3.9% from 4.0%, and the Unemployment Rate will hold at 4.1%. Today, investors turned their attention to statistics on business activity in the services sector in the eurozone: the S&P Global and Hamburg Commercial Bank (HCOB) Services PMI rose from 50.4 points to 51.0 points in March, with neutral preliminary estimates.

GBP/USD

The British pound is gaining in value in the GBP/USD pair during the morning session, developing the strong upward momentum of the previous day and updating October highs. The instrument is testing 1.3090 for a breakout, while market participants are analyzing the new tariffs introduced the day before by the US. As expected, President Donald Trump announced massive reciprocal tariffs against virtually every country. The basic minimum duty is set at 10.0%, and "reciprocal" measures will be applied against all countries where any restrictions exist, at a rate half that amount: as an example, the head of the White House cited the EU, where, according to him, taxes are in effect at a rate of 39.0%, so the retaliatory duty introduced by the US will be at the level of 20.0%. For goods from China, it will be 34.0%, Taiwan — 32.0%, Switzerland — 31.0%. Investors fear that the restrictions could significantly affect the dynamics of foreign trade, undermining confidence in the dollar, since the risks of a recession in the American economy are still relevant. The UK is also on the list, but will only face a minimum tariff of 10.0%. Meanwhile, UK Secretary of State for Business and Trade Jonathan Reynolds has already responded to the US tariffs, saying that the UK will continue to seek a trade deal with the White House administration. At the same time, the official noted that he does not rule out the possibility of introducing retaliatory measures to protect national interests. Today, investors turn their attention to statistics on business activity in the UK services sector: the S&P Global/CIPS Services PMI went down from 53.2 points to 52.2 points with the neutral forecasts. On Friday, at 14:30 (GMT+2), the US will present the final March data on the labor market, which could significantly affect the dynamics of the American currency: forecasts suggest the national economy will add about 140.0 thousand new nonfarm jobs after 151.0 thousand in February, Average Hourly Earnings will slow to 3.9% from 4.0%, and the Unemployment Rate will hold at 4.1%.

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Publication date:

03 April 2025 - 12:40 (GMT)

The Australian dollar is showing a modest decline in the AUD/USD pair during the Asian session, maintaining significant "bearish" influence. The instrument is testing 0.6270 for a breakdown, while at the opening of the daily session, quotes dropped to 0.6225. Market participants are discussing trade restrictions unveiled yesterday by US President Donald Trump. The basic minimum duty is set at 10.0%, and "reciprocal" measures will be applied against all countries where any restrictions exist, at a rate half that amount: as an example, the head of the White House cited the EU, where, according to him, taxes are in effect at a rate of 39.0%, so the retaliatory duty introduced by the US will be at the level of 20.0%. For goods from China, it will be 34.0%, Taiwan — 32.0%, Switzerland — 31.0%, Great Britain — 10.0%. Australia also made the list, but will only face minimum tariffs of 10.0%. Investors fear that the restrictions could significantly affect the dynamics of foreign trade, undermining confidence in the dollar, since the risks of a recession in the American economy are still relevant. Meanwhile, the US currency received moderate support the day before from data on the dynamics of employment in the private sector: the March report from Automatic Data Processing (ADP) showed a rise of 155.0 thousand, following an increase of 84.0 thousand in the previous month, while analysts had expected a rise of 105.0 thousand. In turn, the Australian currency strengthened against the backdrop of the publication of business activity data: the Judo Bank Services PMI rose from 51.2 points to 51.6 points in March, and the Composite PMI rose from 51.3 points to 51.6 points. Foreign trade data, on the other hand, turned out to be quite weak: Exports fell by 3.6% in February after growing by 0.8% the previous month, while Imports increased by 1.6% after –4.0%. This led to a significant decrease in the trade surplus from 5.16 billion Australian dollars to 2.97 billion Australian dollars, while analysts had expected 5.60 billion Australian dollars.

The US dollar is falling noticeably in the USD/JPY pair in Asian trading, developing the "bearish" momentum formed at the end of the last trading week. The instrument is testing the level of 147.40 for a breakdown, updating local lows from March 11. The yen has strengthened amid a surge in demand for safe-haven assets in response to US President Donald Trump's imposition of massive new import tariffs. The basic minimum duty is set at 10.0%, and reciprocal measures will be applied against all countries where any restrictions exist, at a rate half that amount: as an example, the head of the White House cited the EU, where, according to him, taxes are in effect at a rate of 39.0%, therefore the retaliatory duty imposed by the US will be at the level of 20.0%, and for goods from China it will be 34.0%. Japan is no exception to this list and will be forced to face tariffs of 24.0%, which, coupled with additional duties on car imports, could have an extremely negative impact on the dynamics of foreign trade between the countries. Meanwhile, the yen is receiving some support today from business activity data in the services sector: the March Jibun Bank Services PMI showed a modest increase from 49.5 points to 50.0 points. The US currency's position was supported the day before by data on the dynamics of employment in the private sector: the March report from Automatic Data Processing (ADP) showed a rise of 155.0 thousand, following an increase of 84.0 thousand in the previous month, while analysts had expected a rise of 105.0 thousand. On Friday, at 14:30 (GMT+2), the US will present the final March data on the labor market, which could significantly affect the dynamics of the American currency: forecasts suggest the national economy will add about 140.0 thousand new nonfarm jobs after 151.0 thousand in February, Average Hourly Earnings will slow to 3.9% from 4.0%, and the Unemployment Rate will hold at 4.1%.

The XAU/USD pair is growing again during the morning session, developing a strong short-term uptrend and updating new record highs. The instrument is testing 3150.00 for a breakout, while this morning, gold managed to rise to 3170.00. Gold prices are supported by US President Donald Trump's decision to impose reciprocal tariffs on all trading partners that in one way or another restrict the import of American goods. The basic minimum duty is set at 10.0%, and "reciprocal" measures will be applied against all countries where any restrictions exist, at a rate half that amount: as an example, the head of the White House cited the EU, where, according to him, taxes are in effect at a rate of 39.0%, so the retaliatory duty introduced by the US will be at the level of 20.0%. For goods from China, it will be 34.0%, Taiwan — 32.0%, Switzerland — 31.0%, Great Britain — 10.0%. Investors fear that the restrictions could significantly affect the dynamics of foreign trade, undermining confidence in the dollar, since the risks of a recession in the American economy are still relevant. Meanwhile, the US currency received moderate support the day before from data on the dynamics of employment in the private sector: the March report from Automatic Data Processing (ADP) showed a rise of 155.0 thousand, following an increase of 84.0 thousand in the previous month, while analysts had expected a rise of 105.0 thousand. Today, at 16:00 (GMT+2), statistics on business activity in the services sector will be presented: forecasts suggest that the S&P Global PMI will settle at 54.3 points in March, while the Institute for Supply Management (ISM) indicator could fall from 53.5 points to 53.0 points.