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Volatility in FX markets following proposed tarriffs

If you’re a portfolio manager, trading advisor, or compliance risk officer, access to real-time, accurate, and unbiased data is critical for hedging currency exposures, making P&L-driven trading decisions, and valuing multi-currency asset portfolios with confidence.

At TraditionData, we source financial market data directly from Tradition, one of the world’s leading interdealer brokers. Combined with our market-leading analytics, we provide FX market participants with the insights they need to navigate an increasingly complex landscape.

Over the past week, FX markets have experienced heightened volatility, driven by uncertainty around the U.S. government’s announcement of tariffs on Canada, Mexico, and China causing significant swings in major currency pairs.

Originally, these tariffs were set to take effect on Tuesday, February 4th. However, on the afternoon of February 3rd, President Trump held discussions with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau. Both leaders proposed concessions leading to a one-month delay, pushing the potential implementation date to March 1st. Meanwhile, U.S. tariffs on China proceeded as planned on February 4th, prompting immediate retaliatory measures from Beijing. This ongoing trade dispute has injected further uncertainty into the FX markets.

“As illustrated in the charts below, USD appreciation began on Friday, January 31st, coinciding with the tariff announcement. Strength in the dollar persisted through the Asian market open on Sunday, February 2nd. By Monday, February 3rd, as the tariff deadline approached, market participants closely followed developments. After the discussions between President Trump and the North American leaders, the announced concessions triggered a sharp USD retracement into the evening of February 3rd.

“These developments highlight the importance of high-quality, real-time data in fast-moving markets. At hashtag#TraditionData, we equip FX market participants with the tools they need to stay ahead, providing transparency and accuracy in a rapidly evolving landscape.” – Sal Provenzano, FX Product Manager at TraditionData.
 

Author

Sal Provenzano

Sal Provenzano

TraditionData

Sal Provenzano Is the FX Product Manager for the TraditionData business and has been tasked with shaping the future of the FX product range.

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