Forex Today: US Dollar holds ground ahead of confidence data
Here is what you need to know on Tuesday, March 25:
Following a quiet start to the week, the US Dollar (USD) gathered strength in the American session on Monday and the USD Index closed the fourth consecutive day in positive territory. The USD Index holds comfortably above 104.00 early Tuesday as market focus shifts to the US CB Consumer Confidence Index data for February. The US economic calendar will also feature New Home Sales data and regional manufacturing surveys and investors will pay close attention to comments from central bank officials.
US Dollar PRICE This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.31% | 0.09% | 0.95% | -0.20% | -0.10% | 0.34% | 0.20% | |
| EUR | -0.31% | -0.33% | 0.11% | -0.47% | -0.43% | 0.07% | -0.07% | |
| GBP | -0.09% | 0.33% | 0.84% | -0.77% | -0.13% | 0.40% | 0.15% | |
| JPY | -0.95% | -0.11% | -0.84% | -1.14% | -1.06% | -0.59% | -0.75% | |
| CAD | 0.20% | 0.47% | 0.77% | 1.14% | 0.15% | 0.54% | 0.40% | |
| AUD | 0.10% | 0.43% | 0.13% | 1.06% | -0.15% | 0.51% | 0.37% | |
| NZD | -0.34% | -0.07% | -0.40% | 0.59% | -0.54% | -0.51% | -0.07% | |
| CHF | -0.20% | 0.07% | -0.15% | 0.75% | -0.40% | -0.37% | 0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The data from the US showed on Monday that the economic activity in the private sector expanded at an accelerating pace in March, as the S&P Global Composite PMI climbed to 53.5 from 51.6. Meanwhile, US President Donald Trump reiterated their plan to issue additional tariffs on automobiles, aluminum, and pharmaceuticals "soon." Wall Street's main indexes gathered bullish momentum on improving risk mood and registered strong gains on Monday. In the European morning on Tuesday, US stock index futures trade marginally lower on the day.
While speaking before the Japanese parliament on Tuesday, Bank of Japan (BoJ) Governor Kazuo Ueda said they need some time to consider what to do with ETF holdings. After rising nearly 1% on Monday, USD/JPY edged higher in the Asian session on Tuesday and touched its strongest level since early March near 151.00 before correcting lower toward 105.50 by the European morning.
After rising in the European session on Monday, EUR/USD reversed its direction and ended the day with small losses. The pair fluctuates in a relatively tight channel slightly below 1.0800 in the European session on Tuesday. The European economic calendar will offer business sentiment data from Germany.
GBP/USD closed marginally lower on Monday after erasing the majority of its daily gains in the American session. The pair stays on the back foot early Tuesday and trades at around 1.2900.
Gold struggled to find demand in the risk-positive market atmosphere and closed in negative territory for the third consecutive day on Monday. XAU/USD stays relatively quiet on Tuesday and trades above $3,000.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
