The Euro continues to be a beneficiary of all of the turmoil around US trade tariffs, with market participants opting to find comfort in the single currency amidst President Trump’s 104% China tariff confirmation. The EU is preparing to counter President Trump’s 25% tariffs on steel and aluminum with levies next week, followed by a second phase addressing US tariffs on auto exports. Meanwhile, the ECB is expected to cut rates consecutively to 1.5%. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The Pound has been a beneficiary of fallout from the US Dollar on the back of unpredictability and uncertainty around the outlook for the US economy amidst an intense round of tariffs and escalation in trade tension. PM Starmer’s maintenance of a pragmatic, all hands on deck approach to negotiations with the US has also served to keep the Pound well supported into dips. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

Following a call with President Trump, Japanese PM Ishiba secured Japan a spot on the “priority” list among roughly 70 countries vying to negotiate US tariffs, despite his concerns about their alignment with WTO and Japan-USA. trade agreements. President Trump’s appointment of Treasury Secretary Bessent and Trade Representative Greer to lead talks signals a potentially favorable and swift resolution for Japan, leveraging its role as a key US. ally and top investor, with hopes of milder tariff terms and discussions possibly involving a stronger yen. OIS markets are now expecting just 10 basis points of BOJ rate hikes for the year, largely dismissing earlier rate hike bets amid the tariff fallout. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The Australian Dollar has sunk to yet another yearly low and sits at its lowest level against the US Dollar since 2020. The risk correlated commodity currency has been unable to ignore fallout in US equity markets and global risk reduction on the back of an intensification of trade wars. The latest US +100% tariff on China is driving fresh Aussie selling given the Australian economy’s close relationship with China as its top trading partner. Futures markets now anticipate the RBA will slash rates in May, July, and August, with two more cuts to follow thereafter. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The Canadian Dollar has done a formidable job shaking off the latest downside risk from lower US equities and lower oil on the back of escalating global trade tensions. It seems the Loonie is more focused on the fact that Canada may have avoided additional tariffs from the Trump administration. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.

The New Zealand Dollar extended its decline to another yearly low earlier today, on the back of a fresh wave of risk off flow from escalating tensions on the global trade front. Meanwhile, the RBNZ went ahead and cut rates 25 basis points as widely expected and looks set to increase the pace of easing at the next meeting in May. The RBNZ considers US reciprocal tariffs a major threat to global economic growth and domestic inflation prospects, and noted there was room to cut the official cash rate further as the tariffs’ impacts unfold. Looking ahead, key standouts on the calendar come from ECB speak, Fed speak, and the Fed Minutes late in the day.