Trump's Trade Tariffs Shake Global Economy, Currency Markets React

The euro retraced its gains as U.S. President Trump proposed a 50% tariff on EU goods and a 25% tariff on non-U.S. made Apple iPhones. Global currency markets, including the euro and Japanese yen, reacted to this announcement, reflecting wider trade tensions and economic uncertainties.

In a bold move, President Donald Trump has intensified his trade war rhetoric, indicating a 50% tariff on EU imports and 25% on Apple products manufactured outside the U.S., starting June 1. This development has rekindled fears over the impact of tariffs on global trade and economic stability.

While this announcement caused the euro to see initial gains, it quickly pared them as uncertainty loomed. Erik Bregar of Silver Gold Bull noted a shift in traditional currency behaviors in the forex market, as headlines drive the de-dollarization trade discussions.

Moreover, the Japanese yen strengthened due to rising inflation, presenting the Bank of Japan with a potential interest rate hike dilemma, further complicated by ongoing trade conflicts. Investors have turned their focus to mounting U.S. debt and related fiscal policy debates in Congress.

(With inputs from agencies.)