Tariffs rising, inflation lingering, and recession fears growing. Is your currency strategy ready?
Speak to the Garton Global team to stay ahead
Last Week: What Moved Markets
🇺🇸 Dollar dropped as tariff tensions escalated
● The US dollar fell sharply last week after President Trump announced sweeping tariffs on key trading partners from the White House Rose Garden.
● Markets were already on edge, but China’s retaliatory tariff announcement on Friday deepened concerns of a broader trade war.
● Risk appetite deteriorated, global equities sold off, and the S&P posted its worst week since the pandemic, while the dollar lost 2%, extending YTD losses to 8%.
🇪🇺Euro rallied as investors rotated on tariff fallout
● The euro rallied midweek as investors rotated out of sterling following fresh US tariff announcements targeting UK and EU exports.
● Sterling initially gained, hitting a six-month high against the dollar, but momentum shifted as the eurozone was seen as better positioned for negotiations.
● The euro is now up nearly 7% in under seven weeks, with uncertainty surrounding trade talks keeping both currencies volatile.
🇦🇺Aussie dollar slumped on tariff shock and dovish repricing
● The Australian dollar slumped 5.5% last week after the US imposed a 10% tariff on Australian imports, triggering a sharp shift in rate expectations.
● Prime Minister Albanese ruled out retaliation, but broader tariff pressure on Asia dented global trade sentiment.
● Markets moved to price in a 100bps RBA rate cut, up from 75bps earlier in the week, amplifying the currency’s decline.
This Week – What to Watch
🇺🇸 Trump Tariffs Stoke Recession Fears
● US to impose 10% baseline tariffs from 5 April, with higher rates hitting China (34%) and Japan (24%).
● EU and UK also targeted, with threats of retaliation raising trade war risks.
● Markets eye deeper Fed cuts, with nearly 100bps priced in by year-end despite official guidance of just 50bps.
🇺🇸 US Inflation in Focus as Markets Weigh Fed Response
● March CPI due Thursday, with tariff-driven price pressures adding upside risk to already sticky inflation.
● Core PCE rose to 2.8% y/y, while ISM prices index jumped to 69.4, pointing to persistent input costs.
● Stronger inflation prints may limit Fed cut expectations, but any dollar rebound could be short-lived amid recession fears.
Key Events
Wednesday 9th April
03:00 New Zealand Cash Rate
19:00 US FOMC Meeting Minutes
Thursday 10th April
11:00 Australian Governor Bullock Speaks
13:30 US CPI & Unemployment Claims
Friday 11th April
07:00 UK GDP
13:30 US PPI
15:00 US Consumer Sentiment
Questions on how this impacts your business?
Contact the Garton Global Team and schedule a meeting here: https://calendly.com/n-walsh-garton-global/30min