AUD/USD, NZD/USD Volatile After Trump Tariffs; USD/JPY Slides on Safe-Haven Flows

AUD/USD Struggles as Trump Tariffs Weigh on Market Sentiment

After President Trump’s speech, the AUD/USD pair showed uncertainty and traded within the $0.62 to $0.64 range. The pair rebounded following stronger Chinese data, with China’s Caixin Services PMI rising to 51.2 in March, beating the 51.1 forecast and the previous 50.8, as shown in the chart below.

This improvement reflects resilience in China’s service sector, offering some support to the Australian Dollar. However, the rebound was limited as markets reacted to President Trump’s sweeping tariff plan. The US imposed a 10% baseline tariff on all imports and added harsh duties—up to 54%—on goods from 60 countries, including China. As China is Australia’s largest trading partner, fears of a global trade slowdown added to AUD selling pressure.

Moreover, weak trade data added further pressure on the Aussie. The chart below shows that Australia’s trade surplus fell to 2,968M AUD in February, well below the expected 5,600M and January’s revised figure of 5,156 M. This decline signals weakening external demand and weighs on the Australian economy. Meanwhile, concerns over the US economy could limit USD strength. Traders now await the US Initial Jobless Claims, S&P Services PMI, and ISM Services PMI. Weaker results could reduce USD demand and provide short-term support to AUD/USD.

USD/JPY Falls as Trade Tensions Boost Demand for Safe-Haven Yen

The USD/JPY pair declined sharply as the Japanese Yen gained strength amid rising global trade tensions. President Trump’s announcement of sweeping 10% tariffs on all imports triggered a broad risk-off move in financial markets. Investors rushed toward safe-haven assets, lifting the JPY to a three-week high against the USD during the Asian session. The pair dropped toward 148 as risk aversion intensified and stock markets sold off globally.

The US-Japan interest rate differential narrowed further, supporting JPY strength. The 10-year US Treasury yield fell to around 4.0%, a fresh low for the year. Meanwhile, the BoJ-Fed policy divergence continued to influence market sentiment. Traders now expect the Federal Reserve to begin rate cuts as early as June, with three 25-basis-point reductions priced in for 2025. This expectation weighed heavily on the USD, adding downside pressure on the USD/JPY pair despite solid US ADP data showing a March jobs gain of 155K.

At the same time, Japan’s inflation data from Tokyo remained firm, keeping the door open for potential BoJ tightening. Although some traders scaled back expectations for immediate BoJ rate hikes due to trade-related risks, the broader macro picture still favors a stronger Yen. With bearish sentiment around the USD, falling yields, and safe-haven demand intact, the outlook for USD/JPY remains tilted to the downside.

AUD/USD Technical Analysis – Volatility

The 4-hour chart for AUD/USD shows strong volatility within the formation of an ascending broadening wedge pattern. The price has been fluctuating between $0.62 and $0.64. A breakout from these levels will determine the next direction for AUD/USD. Volatility increased after President Trump’s speech, as the US Dollar continues to decline under bearish pressure.

NZD/USD Technical Analysis – Volatility

The 4-hour chart for NZD/USD shows strong volatility within a symmetrical broadening wedge formation as the price fluctuates between the $0.56 and $0.58 zones. The strong rebound from $0.5650 indicates underlying strength, but the pair must break above $0.5850 to continue moving higher.

USD/JPY Technical Analysis – Negative Trend

USD/JPY continues its downward trend after President Trump’s speech, as the US Dollar Index remains under bearish pressure. The pair continues to move lower after hitting strong resistance at $151. The failure to break above this level has increased the possibility of downward pressure toward the $145 region.