Asset Summary – Monday, 7 April
GBPUSD experienced a significant rise, reaching a six-month high of $1.3, primarily driven by a weakened US dollar. This dollar weakness stems from market anxieties surrounding newly announced US tariffs, including a 10% levy on UK imports. Investor concerns about the global economic impact of these tariffs have triggered a flight to safety, benefiting the pound. Furthermore, increased expectations of interest rate cuts by the Bank of England (BoE), as reflected in market pricing, are adding upward pressure on the GBPUSD, with markets now anticipating 62bps worth of cuts. The UK Prime Minister’s intention to act in Britain’s interest is likely a contributing factor to investor confidence in the pound.
EURUSD faces potential volatility and downward pressure. The weakening dollar initially supported the euro, but escalating trade war tensions introduce significant uncertainty. China’s retaliatory tariffs and potential EU countermeasures against US tariffs weigh on global trade, pushing the ECB towards a likely rate cut. Increased expectations for a lower ECB deposit rate by the end of the year signal a weakening Eurozone economy, which could diminish the euro’s appeal and lead to a decline in the EURUSD exchange rate, despite its current position near recent highs.
DOW JONES is facing significant downward pressure, suggested by the sharp decline in Dow futures. The aggressive tariff policies pursued by the White House, combined with retaliatory tariffs from China, Canada, and the EU, are fueling market uncertainty and prompting a selloff. The substantial losses already incurred by the Dow last week, coupled with the Trump administration’s steadfast stance on tariffs despite market reactions, indicate further potential for instability and decline in the Dow’s value.
FTSE 100 has experienced a decline in value since the start of 2025. Trading activity, as indicated by a contract for difference (CFD) that mirrors the index’s performance, reveals a decrease of 118 points, which translates to a 1.44% reduction in the index’s overall value. This suggests a negative trend in the performance of the leading companies listed on the UK stock market.
GOLD is experiencing downward pressure as investors sell off holdings to cover losses in other markets, reacting to a broader financial market downturn. Heightened trade war anxieties, driven by newly implemented and anticipated tariffs, are fueling recession fears, prompting liquidation of gold positions. Federal Reserve concerns about the inflationary and growth-dampening effects of these tariffs further contribute to the negative sentiment surrounding gold, suggesting a challenging near-term outlook for its price.