It’s been another volatile and eventful week in the markets, and as we head into Friday, there’s no sign of a reprieve. The U.S. dollar continues to weaken, dragged lower by a combination of soft economic data and intensifying trade disputes. 

Market Snapshot

• USD/CAD: Down 0.85%
• GBP/USD: Up 1.2%
• EUR/USD: Up 1.65%
• USD/MXN: Down 0.5%

The dollar has come under renewed pressure, primarily due to the ever-evolving landscape of global trade tensions. This weakness was further compounded this morning by U.S. March PPI data, which fell 0.4%, well below all forecasts, intensifying the dollar’s slide.

No Respite for Markets

Many were hoping for a calmer session, but broad-based dollar selling continues—particularly against safe-haven currencies like the yen, Swiss franc, and euro. Sterling, while less traditionally seen as a haven, is also gaining ground in today’s session.

Escalating U.S.-China Trade Tensions

Overnight, China responded to recent U.S. tariff hikes (totaling 145%) with their own increase—raising tariffs on U.S. goods to 125%. In their statement, Chinese officials emphasized the “absurdity” of current tariff levels.

They pledged to disregard any further retaliatory tariffs, stating that “American goods are no longer marketable in China” under the current trade regime.

Lingering Uncertainty

Inflation data this week, including a weaker-than-expected CPI, highlights the unpredictable impact of tariffs on both producers and consumers. Reports from the Yale Budget Lab suggest that retailers may be forced to raise prices within two weeks as the cost burden from tariffs intensifies.

Focus Turning to Micro – Q1 Earnings Season Begins

As macroeconomic pressures mount, the market’s attention is beginning to shift toward the start of Q1 corporate earnings. Investors will be watching closely to see how company guidance and reported results reflect the economic and geopolitical turbulence.

The backdrop remains messy and highly uncertain. With no resolution in sight on trade, and data pointing to slowing U.S. inflation, the dollar remains vulnerable.

Markets now look to upcoming earnings and any policy commentary from U.S. and Chinese officials that might hint at a path forward. Until then, investors are advised to remain nimble, stay focused on headlines, and prepare for further interconnected volatility across asset classes.