Last week, the Trump administration announced the introduction of import tariffs on various countries, including 20% on the EU and 34% on China, further intensifying uncertainty in the currency markets. These measures continue a broader tariff policy aimed at protecting American manufacturers. As expected, the move contributed to increased volatility in major currency pairs such as EUR/USD, GBP/USD, USD/JPY, and others.

The White House's actions triggered sharp losses across equity and commodity markets, raising concerns among investors looking to minimise risks in an unstable environment. The imposition of tariffs has also had a notable impact on commodity-linked currencies, such as the Australian dollar, which is traditionally sensitive to shifts in global trade due to Australia's dependence on raw material exports.

Amid global economic instability, market participants are focusing on how these developments will affect the global economy and the performance of commodity currencies.

AUD/USD

News of retaliatory tariffs from China prompted a sharp fall in AUD/USD. The pair has lost over 200 pips since the start of this week and broke a key support level at 0.6900 yesterday. Should tensions escalate further, the pair may continue its decline toward the 2020 lows around 0.5790–0.5700. A corrective upward move following such a steep drop could reach the 0.6130–0.6090 zone.

The following events may significantly influence AUD/USD movements:

• Today at 17:00 (GMT+2): Wholesale Inventories (US)
• Today at 17:00 (GMT+2): Wholesale Sales (US)
• Today at 20:00 (GMT+2): 10-Year Treasury Note Auction (US)
• Today at 21:00 (GMT+2): FOMC Meeting Minutes (US)

USD/CAD

At the end of last week, USD/CAD broke below the lower boundary of its medium-term range between 1.4560–1.4250. The price nearly tested the psychological level at 1.4000 but rebounded sharply, returning back into the aforementioned range. If the 1.4200–1.4160 zone holds as support, further growth towards 1.4400–1.4300 is possible.

Key events likely to influence USD/CAD in upcoming trading sessions include:

• Today at 17:30 (GMT+2): Crude Oil Inventories (US)
• Today at 18:00 (GMT+2): Thomson Reuters/Ipsos Primary Consumer Sentiment Index (Canada)
• Tomorrow at 15:30 (GMT+2): Building Permits (Canada)

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