The U.S. dollar took a hit after President Trump backpedaled on his latest tariff threats, coupled with a softer-than-expected JOLTS jobs report (7.6M job openings in December vs. 8.15M in November). While this triggered a broad-based USD selloff, I wouldn’t get too comfortable with that narrative—there’s more tariff turbulence ahead, particularly with Europe and China still squarely in the crosshairs. Unless Trump suddenly embraces his “Deal Maker-in-Chief” persona, the April 1 tariff review should serve as a backstop, keeping Trade War Premium baked into the dollar and limiting any major downside correction.
In a fresh escalation, just 49 minutes ago, the U.S. Postal Service dropped a bombshell—it’s halting all inbound packages from China and Hong Kong (except for letters) until further notice. This wasn’t on anyone’s radar, and the reaction was swift—Chinese stocks took a hit, adding another layer of uncertainty to an already volatile trade landscape.
Meanwhile, China’s economy isn’t catching any breaks. A private gauge of China’s service activity slowed in January, mirroring official data that showed both demand and supply cooling. However, in the classic “bad news is good news” playbook, markets are expecting this to force more China stimulus, which is keeping the yuan from buckling—for now.
That said, this is turning into a "Boy Who Cried Wolf" FX setup—traders are waiting for the next major move on the tariff chessboard before making aggressive bets, but with USD positioning still stretched, most traders are hedged rather than fully reversing dollar longs. Those who booked profits on Monday are likely eyeing a reload on dollar longs at better levels.
The real showstopper today? The Yen
The JPY ripped higher, rallying 100 pips, as strong wage growth data put a Bank of Japan rate hike squarely on the table. December’s labor cash earnings came in hotter than expected, and November’s numbers saw upward revisions—a bullish signal that traders weren’t going to ignore. If this trend continues into Shunto wage negotiations, markets will likely go all-in on a BOJ rate hike—possibly as early as May.
Bottom line: The tariff saga is far from over, and while today’s USD dip may look like a trend shift, the bigger picture still favors strong underlying dollar support—especially with April 1 looming. The yen, on the other hand, just got fresh rocket fuel, and traders are piling into the BOJ tightening story with conviction.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
Recommended Content
Editors’ Picks

EUR/USD hits two-week tops near 1.0500 on poor US Retail Sales
The selling pressure continues to hurt the US Dollar and now encourages EUR/USD to advance to new two-week peaks in levels just shy of the 1.0500 barrier in the wake of disappointing results from US Retail Sales.

GBP/USD surpasses 1.2600 on weaker US Dollar
GBP/USD extends its march north and reclaims the 1.2600 hurdle for the first time since December on the back of the increasing downward bias in the Greenback, particularly exacerbated following disheartening US results.

Gold maintains the bid tone near $2,940
The continuation of the offered stance in the Greenback coupled with declining US yields across the board underpin the extra rebound in Gold prices, which trade at shouting distance from their record highs.

Weekly wrap: XRP, Solana and Dogecoin lead altcoin gains on Friday
XRP, Solana (SOL) and Dogecoin (DOGE) gained 5.91%, 2.88% and 3.36% respectively on Friday. While Bitcoin (BTC) hovers around the $97,000 level, the three altcoins pave the way for recovery and rally in altcoins ranking within the top 50 cryptocurrencies by market capitalization on CoinGecko.

Tariffs likely to impart a modest stagflationary hit to the economy this year
The economic policies of the Trump administration are starting to take shape. President Trump has already announced the imposition of tariffs on some of America's trading partners, and we assume there will be more levies, which will be matched by foreign retaliation, in the coming quarters.

The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.