Market Drivers – US Session: Dollar Surges to Three-Day Highs Amid Trade Tensions and Safe-Haven Demand

The U.S. dollar roared back to life on Tuesday, April 8, 2025, climbing to three-day highs as investors flocked to safe-haven assets amid escalating trade tensions sparked by President Trump’s tariffs. The Greenback, which had already begun its recovery on Friday, gained further momentum, with the US Dollar Index (DXY) reaching approximately 103.50. This surge was fueled by a pervasive risk-off mood in global markets and a rebound in U.S. yields across the curve. Investors are keeping a close eye on upcoming economic indicators, including the NFIB Business Optimism Index, the API’s weekly report on U.S. crude oil stockpiles, and a speech from Fed official Daly, all of which could provide further clues about the economic outlook.

Meanwhile, the euro took a hit, with EUR/USD tumbling to two-day lows and dipping below the critical 1.0900 level. Growing concerns over U.S. trade policies and their potential ripple effects on the American economy weighed heavily on the pair. In Germany, attention is turning to the final Inflation Rate and Current Account data, both due on April 11, as markets brace for more volatility. Across the Channel, GBP/USD faced even steeper losses, plunging to multi-week lows near the 1.2700 support and slicing through the pivotal 200-day simple moving average. The UK’s economic calendar is packed on April 11, with GDP figures, Goods Trade Balance, Industrial and Manufacturing Production, Construction Output, and the NIESR Monthly GDP Tracker all set to shed light on the nation’s economic health.

The yen also felt the dollar’s strength, as USD/JPY pushed past the key 148.00 mark to hit two-day highs, building on Friday’s gains. Japan’s upcoming data releases, including the Eco Watchers survey, Current Account figures, and Bank Lending statistics, will be closely watched for signs of resilience. Down under, AUD/USD extended its sharp retreat from Friday, testing the 0.5900 level—a threshold not seen since March 2020—amid weakening sentiment. Australia’s Westpac Consumer Confidence gauge and NAB Business Confidence index, both due on April 8, may offer insight into the nation’s economic mood.

On the commodity front, crude oil prices took a nosedive, with WTI sinking to over three-year lows near $59.00 per barrel. Persistent fears of a global trade war and its dampening effect on oil demand drove the decline. Precious metals weren’t spared either—gold prices fell for a third straight day, slipping below the $3,000-per-troy-ounce mark as stock markets worldwide continued their sharp sell-off. Silver followed suit, dropping to September levels near $28.00 per ounce before mounting a modest recovery. As trade tensions show no signs of easing, the dollar’s safe-haven appeal remains a dominant force, leaving currencies, commodities, and investor confidence hanging in the balance.