Trump Imposes New Tariffs
On February 2, 2025, President Donald Trump signed an executive order imposing tariffs on imports from Canada, Mexico, and China. These include a 25% tariff on most goods from Canada and Mexico and a 10% tariff on energy products from Canada and imports from China, effective February 4. This move significantly impacts major and minor currency pairs, causing market volatility.
Global Reactions and Forex Impacts
In response, Canada and Mexico plan equivalent 25% retaliatory tariffs, while China intends to file a WTO complaint and consider countermeasures. These actions influence short-term forex gains, with traders adjusting strategies to navigate price action forecasting challenges.
Market Reactions
Asian markets plunged, with the Hang Seng Index down 1.9% and Japan’s Nikkei 225 dropping 2.4%. Economists predict higher consumer prices, reduced purchasing power, and inflation, affecting forex profits.
Currency Pair Analysis
DXY (US Dollar Index)
The dollar surged post-tariff announcement, strengthening against major currencies. Inflation concerns and trade war fears boost its appeal.
GBPUSD
The Pound consolidates amid dollar strength. Technical indicators show bearish trends, impacting price action forecasting.
AUDUSD & NZDUSD
Both currencies face downward pressure due to the strong dollar. Short-term forex gains depend on strategic entries, avoiding impulsive trades.
EURUSD
While holding slightly better, the Euro faces persistent selling pressure. Traders look for gaps to re-enter short positions.
USDJPY & USDCHF
The Yen and Franc exhibit bullish momentum due to their safe-haven status. However, price action forecasting remains complex amid BOJ policies.
USDCAD
The CAD rallies due to direct tariff impacts. Long-term bullish trends offer opportunities for compounding forex profits.
Precious Metals Outlook
GOLD
Despite pullbacks, GOLD maintains a bullish outlook. Tariffs and dollar strength influence its performance, with major banks hedging risks.
SILVER
SILVER remains stable, with buying interest linked to GOLD’s performance. Support levels offer strategic entry points.
Conclusion
Trump’s tariffs reshape global markets, influencing major and minor currency pairs. Traders must leverage trading platform features, monitor price action, and adjust strategies to optimize compounding forex profits.
