New tariffs, markets selling off

Frank Walbaum

lmportant news this week:

Dollar breakout looms as tariffs trigger risk-off sentiment

The US Dollar is gaining momentum and appears ready to break above an important resistance zone. Following the ECB meeting, the Euro has weakened further, while investors have shifted into the Dollar amid growing geopolitical and trade-related uncertainty. Fresh US tariffs announced by President Trump are weighing on global sentiment. Around 60 additional countries have reportedly been included in the latest tariff package, with import duties ranging from 10% to 12.5%. The measures are aimed at addressing concerns over forced labor, unfair trade practices, and protecting domestic manufacturing, adding another layer of uncertainty to global trade.
Markets have reacted with a clear risk-off tone. Equities are under pressure as investors reassess the impact of higher trade barriers on global growth and corporate earnings. Gold and Silver are also trading weaker despite the defensive environment, as the stronger US Dollar outweighs traditional safe-haven demand. Should the Dollar continue to rally, further downside in precious metals cannot be ruled out.

Market talk

Risk sentiment has deteriorated noticeably. The combination of a stronger US Dollar, renewed trade tensions, and fragile equity markets is creating a more defensive investment environment. The S&P 500 and Nasdaq are approaching important technical support levels, and a decisive break below these areas could trigger a broader wave of selling and accelerate risk-off positioning. FX traders will closely monitor whether the Dollar Index confirms its breakout, as this could put additional pressure on EURUSD, GBPUSD, commodity currencies, and precious metals. The focus now shifts to whether markets stabilise after the initial tariff reaction or whether risk aversion continues to dominate the week.

Tendencies in the markets

Equities weak, USD strong, BTC sideways, oil strong, Silver correcting, Gold correcting.

Author

Frank Walbaum

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold stalls recovery from three-month low as Fed hike bets and USD uptick cap gains

Gold struggles to capitalize on a modest intraday bounce from levels below the $4,000 psychological mark, or a three-month low set during the Asian session, and sticks to a negative tone for the second straight day. The Federal Reserve recently signaled that there is no urgency to raise interest rates. Traders, however, are still pricing in around an 80% chance that the US central bank will raise borrowing costs again at its December policy meeting.

Bitcoin, Ethereum, and Ripple rebound as major support levels cap recent sell-off

Bitcoin, Ethereum and Ripple rebound modestly on Friday after correcting and testing their key support zone the previous day. BTC holds the 50-day EMA, ETH finds support around the 100-day EMA, while XRP holds the horizontal floor near $1.300. The price action of these top three cryptocurrencies suggests a recovery if this critical support zone holds; a decisive close below these levels suggests a deeper correction.

The week ahead – UK budget, Shell, BP and HSBC and NatWest results

Financial markets have undergone another turbulent week with concerns about public sector debt levels, the impact of energy policy and higher oil and gas prices, and what events in France might mean for the UK economy going forward.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.