The US Dollar weakened against major currencies amid concerns over the impact of US tariffs. Equity markets declined as China announced retaliatory measures. The US Dollar Index (DXY) experienced downward pressure, briefly testing the 102.00 level before recovering slightly during the European trading session, currently fluctuating around 102.30. Tariffs imposed by the United States are scheduled to take effect, prompting retaliatory responses from China and Canada, thereby amplifying concerns regarding a potential global economic slowdown. The economic calendar includes minor data releases preceding the publication of the Federal Open Market Committee (FOMC) Minutes from the March Federal Reserve (Fed) meeting. However, the Minutes are not anticipated to reveal significant insights, given recent statements from Fed Chairman Jerome Powell indicating a cautious, “wait-and-see” approach to monetary policy. Market participants are increasingly pricing in expectations for further interest rate reductions by the Fed in 2025. In response to the US tariffs, the Chinese Finance Ministry announced counter-tariffs on all US goods, effective April 10th. US Treasury Secretary Scott Bessent cautioned China against currency devaluation as a means to circumvent the tariffs, asserting that such a strategy would be ineffective and that China would ultimately bear the brunt of the trade conflict, urging them to negotiate.
