Good morning traders from a drizzly, cloud-blanketed IntelliTrade desk, where the thermometer is stuck around 9â11°C, the windows are streaked with light rain, and the only blue we are seeing is on the FX heatmap. Top up your coffee, because between tariff chaos, record gold and a very crowded data calendar, todayâs session is anything but dull.
Overall Market Sentiment
The tone is risk off but not in full panic. The US Dollar Index (DXY) is edging higher again, sitting around 97.9, up roughly 0.2 percent today and about 1 percent above last weekâs lows, as safe-haven demand and higher yields offset worries that erratic tariffs could erode the dollarâs longer term appeal.
Wall Street had a rough start to the week, with the Dow down about 1.6 percent and the S&P 500 off around 1.2 percent yesterday, driven by fresh tariff hikes and another wave of AI related de-rating.Asian stocks tried to stabilise overnight, but sentiment is still shaky, and Europe opened softer as investors digest the policy noise.
Cross-asset stress is visible. Gold has punched back above 5,200 dollars, with spot around 5,170â5,250 after touching 5,251 dollars per ounce on Comex earlier in the day, up more than 75 percent year on year.Brent crude trades near 72 dollars per barrel, about 17 percent higher year to date, as markets price both supply risk and a geopolitical premium.Bitcoin is adding to yesterdayâs drop, trading in the low 63â64 thousand area after falling more than 1.8 percent today and nearly 6 percent over two sessions.
Geopolitics
Geopolitics is still a core catalyst. After the US Supreme Court curtailed the use of emergency powers for tariffs, the White House quickly pivoted to other legal tools, raising global tariffs to around 15 percent and igniting a fresh trade shock.That move has triggered retaliatory rhetoric, including Chinese export controls on Japanese firms, and raised questions about the durability of global supply chains just as AI related capex is running hot.
At the same time, Middle East tensions remain elevated, with the US scaling back embassy staff in Beirut and markets still mindful of the Iran risk, which helps explain why Brent near 72 dollars and gold above 5,200 dollars coexist with weaker equities.
For FX, this combination tends to:
- Support the dollar, yen and franc as liquidity and safety havens,
- Pressure high beta currencies like AUD and NZD that are tied to global trade,
- And keep gold functioning as an alternative hedge when confidence in policy is shaky.
Markets are watching whether tariffs freeze at current levels or escalate again. A sustained climb in Brent into the mid 70s plus sticky gold above 5,200 would start to challenge central banksâ disinflation narratives more seriously.
Policy and data: today and the rest of the week
Today (Tuesday)
- In the United States, the focus is on the Conference Board Consumer Confidence index, due later today. Consumer spending is roughly 70 percent of US GDP, so confidence has direct implications for how resilient growth can stay in the face of tariff shocks and high rates.
- In Asia, China and Japan are both back from holidays, which restores liquidity but also means more immediate reaction to trade headlines in local FX and equities.
The rest of this week
- United States
- Fridayâs Producer Price Index (PPI) is the main macro event, giving another read on pipeline price pressures after softer consumer prints. Upside surprises would make it harder for the Fed to justify early cuts, preserving yield support for the dollar.
- Euro area and Germany
- Final euro area inflation plus German Ifo and CPI will show whether disinflation is on track and whether business sentiment is stabilising after last yearâs industrial slump. This feeds directly into expectations for a first ECB cut later in the year.
- United Kingdom
- After last weekâs drop in headline inflation, UK data on activity and housing will help markets refine the Bank of England path, especially whether a first cut around mid year remains likely.
- Australia
- Australian CPI and a speech from the RBA Governor arrive midweek and are crucial for a market that has pushed AUD higher on the carry story. Any downside surprise on inflation would be uncomfortable for those assuming the RBA will stay significantly above peers for long.
- Japan
- Japanese CPI on Thursday will be read through the lens of a possible further BoJ normalisation and persistent yen weakness. Some former officials have openly suggested that another hike could arrive as soon as spring if USDJPY presses higher again.
- Canada, Switzerland, China
- Toward the end of the week, Canadian inflation, Swiss growth data and China PMIs will all hit, rounding out the global picture and providing fresh input for CAD, CHF and the China-sensitive commodity bloc.
Net result: tariffs plus gold and oil, layered on top of a busy inflation and confidence calendar, will decide whether the dollarâs recent firmness is a short squeeze or the start of a longer consolidation phase.
Currency outlooks
đș USD â Safe-haven bid offsets structural worries
The US Dollar Index around 97.9 is grinding higher, up roughly 0.2 percent today and about 1 percent over the past week, although still down significantly over the past year.The immediate driver is a defensive rotation into liquid dollar assets as tariffs, AI valuation fears and geopolitical risks collide.
At the same time, markets know the Fed is unlikely to hike again and still expect cuts later in 2026 if inflation data cooperate. That caps the upside and explains why dollar strength today is moderate rather than explosive.
Near term, risks for USD look tilted slightly to the upside. A firm consumer confidence reading and steady PPI would support yields and keep DXY in the 97.5â98.5 band. It would probably take either a surprising de-escalation on tariffs or a notable downside miss on US inflation to flip the narrative back toward immediate dollar weakness.
âïž EUR â Rangebound as euro benefits from dollar wobble but faces growth questions
EURUSD is sitting around 1.177â1.179, near the middle of todayâs 1.1772â1.1797 range, after a modest tariff-driven bounce yesterday.Over the past year the pair is still up roughly 12 percent, which underlines that the recent consolidation is happening inside a larger recovery from the 2022â23 lows.
The euro is benefiting from a slightly less attractive US growth and policy mix and from investors looking for alternatives to the dollar, but it is also constrained by a still-soft euro area growth profile and cautious ECB messaging. This weekâs inflation and sentiment data will be crucial for confirming that the region is not slipping back toward stagnation.
For the rest of this week, risks for EUR versus USD look broadly balanced. As long as data on both sides of the Atlantic come in close to expectations, EURUSD is likely to oscillate between 1.17 support and 1.19 resistance, with tariff headlines causing most of the intraday noise.
đ» GBP â Pound stays under pressure in a nervous, tariff-sensitive tape
GBPUSD is trading near 1.348, toward the lower half of its recent range and fractionally down from yesterday.Technical commentary notes that the pair is still âsurrounded by negative pressuresâ, with momentum indicators rolling over after last weekâs bounce.
Fundamentally, softer UK inflation has given the Bank of England more room to contemplate cuts later this year, while tariff and AI worries weigh on risk assets, where UK indices have significant exposure to global cyclical sectors. That combination tends to leave sterling slightly on the defensive against the dollar during risk off episodes.
Into the rest of the week, risks for GBP versus USD lean to the downside, with markets watching 1.34â1.345 as an important support area and seeing 1.36â1.37 as resistance unless UK growth or wage data surprise on the strong side.
đ» CAD â Stronger dollar and growth worries outweigh oil support
The Canadian dollar is slightly weaker, with USDCAD around 1.371, at the upper end of its recent band.Oil around 71â72 dollars would normally be a clear positive for CAD, and it does help, but today that support is more than offset by a firmer dollar and concerns that global trade frictions could slow North American growth.
Technically, USDCAD is trading in a bullish corrective channel, with local resistance flagged near 1.3720, according to intraday analysis.Without a decisive change in the tariff narrative or a big upside surprise in Canadian data, that pattern tends to favour a mildly weaker CAD tone for the rest of the week.
âïž CHF â Franc firm in big picture, tactically softer on USD leg
USDCHF is trading around 0.776â0.777, slightly higher on the day and near the top of todayâs intraday range, even though the franc remains about 13 percent stronger year on year versus the dollar.Intraday notes highlight how the pair is taking advantage of strong technical support near 0.7725, with buyers stepping in above that level.
Switzerlandâs low inflation and stable growth allow the SNB to live with a robust franc, which keeps CHF attractive as a longer term safe haven. In the very short term, though, the dollarâs global role and US yield levels mean that some of the safe-haven flows linked to tariffs and AI jitters still go into USD rather than franc assets.
For this week, risks for CHF versus USD look roughly balanced. As long as the geopolitical and tariff situation does not explode further, USDCHF may oscillate between 0.772 and 0.78, with any larger franc strength likely needing either a clear escalation in risk aversion or surprisingly soft US inflation.
đ» JPY â Yen pressured as yield gap and tariff tensions bite
The yen is back under pressure. USDJPY is trading around 155.2â155.3, up about 0.4 percent today and near the top of its recent range after a strong intraday rally supported by trade above key moving averages.
Tariff turmoil and AI jitters would normally favour safe havens like JPY, but the very wide yield gap between US and Japanese debt, and expectations that BoJ normalisation will be slow and cautious, are dominating. House views from some large banks still point to ongoing dollar buying and yen selling unless USDJPY approaches the 158â160 area, where intervention risk rises.
For the rest of the week, risks for JPY versus USD lean to further yen weakness, especially if US confidence and PPI hold up. A push through the 155.5â156 zone would refocus attention on potential policy responses from Tokyo, while any sharp risk-off spike that drags US yields down could see USDJPY quickly pull back toward 153â154.
đ» AUD â Aussie squeezed between yield support and global growth fears
AUDUSD last trades near 0.706â0.707, having slipped from yesterdayâs high around 0.711.Intraday analysis describes the pair as âbetween hammer and anvilâ, with price stuck below the 50-day moving average and facing continuous negative pressure.
The Reserve Bank of Australiaâs relatively high policy rate still offers carry appeal, but the combination of tariff uncertainty, growth worries in important export destinations and a stronger dollar is limiting upside. This Wednesdayâs Australian CPI and rhetoric from the RBA will heavily influence whether the market continues to see AUD as a premium yield play or starts to price earlier easing.
Given these cross currents, risks for AUD versus USD this week lean to the downside. The 0.70 level is a key psychological and technical support zone, while resistance sits around 0.71â0.715, where rallies have been sold recently.
đ» NZD â Kiwi stuck in corrective mode amid RBNZ caution and tariff drag
NZDUSD is trading around 0.596, after several sessions of grinding lower from above 0.60.Short-term analysis notes that the bearish corrective trend still dominates, even after a minor bounce on better local retail sales data.
The earlier RBNZ decision to hold at 2.25 percent and signal a cautious stance has already forced markets to dial back expectations for further tightening. Now, added uncertainty about global trade and China demand weighs on New Zealandâs externally focused economy and currency.
For this week, risks for NZD versus USD remain tilted to the downside. Markets are watching support in the 0.595â0.5965 area, with deeper levels near 0.59 coming into view if global risk sentiment worsens. On the upside, any rallies toward 0.605â0.61 are likely to meet supply unless there is a clear improvement in the macro backdrop.
Cross-asset wrap
- đȘ Gold:
Gold is trading around 5,170 dollars per ounce, down just over 1 percent on the day but still up more than 3 percent in the past month and over 75 percent year on year, after briefly pushing above 5,250 earlier.The metal is caught between two forces: higher tariffs and Middle East risk that support safe-haven demand, and the possibility that strong US data could keep real yields elevated. For now, the 5,000â5,250 band remains the main battlefield for macro portfolios. - đą Oil:
Brent crude around 72 dollars reflects a firmly positive trend, up roughly 17 percent year to date, as traders price in geopolitical risk premia and expect further inventory tightening.This level of oil is high enough to matter for headline inflation and for exporters like Canada, but not yet extreme enough to force central banks into new hikes if core inflation behaves. - đ Stocks:
US equities suffered a sharp selloff yesterday, with the Dow down around 800 points, and the S&P 500 and Nasdaq lower by about 1.2 and 1.3 percent respectively, as tariff escalation and AI valuation fears hit at the same time.Futures point to a cautious open today, while Asian and European markets show a mix of stabilisation and follow-through selling. For now, equities remain the main shock absorber when policy uncertainty spikes. - âż Crypto:
Bitcoin is trading near 63,500â64,000 dollars, after a swift Asia-hours drop and continued selling that has pushed it down more than 6 percent over two days.The move mirrors broader risk aversion and reinforces the idea that BTC is currently behaving as a high beta macro asset, very sensitive to real yields, tech valuations and policy shocks, rather than a consistent hedge against those forces.
This is general, educational macro and FX commentary. It is not investment advice and not a trading signal.
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