Client Portal
  1. FX Outlook
  2. Daily FX Report

Daily FX Report

Read disclaimer

Back to reports

Authors
Daria Efanova

Daria Efanova Head of Research

Contact research

Markets Respond to US Tariffs

EUR / USD

EURUSD gapped lower late Sunday after the Trump administration announced tariffs on China, Mexico, and Canada. The pair briefly breached the 1.02 support level before recovering some losses to 1.0228. While no direct tariff measures were implemented against the European Union, news over the weekend is likely to significantly boost the dollar at the Monday market open, leading to a sell-off in EUR/USD. These tariffs may lead to increased inflationary pressures in the US, influencing Federal Reserve monetary policy decisions and result in markets anticipating fewer interest rate cuts this year.

The European Union has raised concerns about potential US tariffs on EU products, which could further weaken the Euro. With growing expectations that the EU may be the next target for US tariff announcements, pressure on the Euro is increasing. Any such announcement could lead to another decline in the EUR/USD exchange rate.

While we expect the 1.02 support level to hold in the coming days, the Euro should remain under pressure today as the markets analyse the tariff news and its implications.

USD / JPY

On Sunday, USDJPY briefly spiked above the 155.50 level following the announcement by the Trump administration to implement tariffs on China, Canada, and Mexico. However, this momentum did not persist, leading to a moderate correction down to 155.20. The markets do not expect a trade disruption between the US and Japan, which contributed to this pullback.

While the US dollar may introduce some volatility into the pair's trading behaviour today, these fluctuations are likely to be less significant than those seen with currencies from developed nations.

Overall, USDJPY should strengthen today, but the yen's safe haven properties might limit significant upward gains.

GBP / USD

GBPUSD weakened to 1.2275 on Sunday following the announcement of tariffs by the US on China, Mexico, and Canada, which led to a stronger valuation of the dollar. Retaliatory measures from the affected countries could disrupt global trade flows, negatively impacting the economic outlook for major economies, including both the UK and the US.

Additionally, with the Bank of England (BOE) meeting scheduled for this week, bearish pressures are increasing on GBPUSD. The BOE is expected to cut interest rates by 25 basis points to 4.5%. This dovish approach, along with internal dissent within the central bank, could place further downward pressure on the GBP against the USD later in the week.

As markets digest the tariff news today, GBPUSD is expected to remain under pressure. 

Economic Calendar

03022025

Contents

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

This report was prepared with the assistance of artificial intelligence.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

Sign up to get the latest market insights

We will email you each time a new report has been published.

You might also be interested in...

FX

The EURUSD pair has been under significant selling pressure in recent weeks, driven by an increasingly divergent economic trajectory between the European and US economies. This divergence, compounded by growing political and fiscal uncertainties, is creating additional challenges for central banks in both regions as they grapple with the fast-changing economic environment. With budget issues in France and Germany, along with Trump assuming office in January, what is the outlook for EUR/USD in the coming months?
FX Monthly Report - Euro Focus
Metals

As we enter Q4 2024, several trends from the previous quarter continue to persist. The central banks began their interest rate cutting cycles, with the Fed initiating a 50bps cut at its first meeting. The ECB is on a similar path, but it is facing strong pressures to cut due to the weakening performance of the Eurozone, which is creating a larger yield differential compared to the US. In China, authorities are aiming to stimulate the economy through fiscal and monetary policy measures; however, they are struggling to restore market confidence, particularly in the construction sector. These factors, combined with the upcoming US elections in November, create a strong likelihood of increased volatility. In this report, we will examine the potential trajectories for base, ferrous, and precious metals in the final months of the year.
Quarterly Metals Report
Coffee Fields Beat The Heat W

Brazil remains a dominant player in the coffee market, with farmers leveraging high domestic prices to maintain strategic selling practices despite wider dollar-based discounts. Nonetheless, challenging weather conditions throughout the growing season are casting a shadow over Brazil's coffee prospects. Understanding these dynamics is essential for making informed decisions as we move forward. Read our coffee crop update, with commentary on recent price activity, and coffee market forecasts to take advantage of market movements. 
Coffee Crop Update - Beat the Heat
UK Economy Outlook 2025

UK Economy - 2025 Outlook
Electric Vehicles Report Image 2024

This report provides a comprehensive analysis of the EV market, with a particular focus being on supply chain analysis through mining, battery cell production, and sales of EVs. Additionally, we examine the implications of EV-specific tariffs, assessing their impact on cross-border trade, manufacturing costs, and company competitiveness.
Electric Vehicle and Battery Material Report - December 2024
Back to top

Subscribe

Select all the reports you wish to sign up for and submit your details below

Thank you for subscribing.

You should receive a confirmation email shortly. Please check your spam /junk mail folder if not received within a few minutes.

Do not forget to click the link in the confirmation message, otherwise, you will not receive any of our future emails.

This field is required
This field is required
This field is required
This field is required

Please note that we cannot email subscribers in the European Economic Area (EEA) or Switzerland, except for journalists.

(Please note that we cannot email subscribers in the European Economic Area (EEA) or Switzerland, except for journalists.)
You must agree to our terms and conditions before submitting the form
* Mandatory fields