Auto Tariff Hits Wall Street, But Currencies Shrug Off the Drip Feed
| Action Insight Daily Report 3-27-25 |
Auto Tariff Hits Wall Street, But Currencies Shrug Off the Drip Feed |
The steady drip of tariff news from US President Donald Trump continued overnight, pushing US equities lower and weighing on risk sentiment globally. The tech-heavy NASDAQ led the decline with a drop of over 2%, while broader US indexes also closed in the red. In Asia, Japan’s Nikkei and South Korea’s Kospi followed with notable declines—particularly in auto stocks—while other regional bourses stayed relatively steady, suggesting selective impact. Despite the equity selloff, currency markets have shown muted reactions so far. Major FX pairs and crosses are treading water, largely trapped within yesterday’s ranges. This suggests that while traders are alert to the evolving trade policy, many are experiencing tariff fatigue and are reluctant to reposition aggressively before next week’s pivotal developments. The latest tariff news centers around a 25% duty on imported cars and light trucks “not made in the United States,” scheduled to take effect on April 3. However, the rollout comes with key exemptions. Automotive parts compliant with USMCA are spared, and all other auto parts imports are exempt until May 3 to allow time for administrative clarity. It’s a classic case of shock softened by implementation ambiguity. The centerpiece remains April 2, which Trump has dubbed “liberation day” and “the big one,” when reciprocal tariffs will be formally announced. However, in a shift of tone, Trump now says the measures will be “very lenient,” and “less than the tariff they’ve been charging (the US) for decades,” hinting at a softer-than-expected rollout. That may explain the relatively calm tone in FX markets despite the ongoing trade drama.... |
EUR/USD Daily Outlook Daily Pivots: (S1) 1.0729; (P) 1.0767; (R1) 1.0789; More... Outlook in EUR/USD is unchanged that strong support is expected from 38.2% retracement of 1.0358 to 1.0953 at 1.0726 to completion the correction from 1.0953. On the upside, break of 1.0857 will bring retest of 1.0953 first. Firm break there will resume larger rise from 1.0176. However, sustained break of 1.0726 will bring deeper correction to 55 D EMA (now at 1.0630). | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 09:00 | EUR | Eurozone M3 Money Supply Y/Y Feb | 3.80% | 3.60% | | 12:30 | USD | Initial Jobless Claims (Mar 21) | 225K | 223K | | 12:30 | USD | GDP Annualized Q4 F | 2.30% | 2.30% | | 12:30 | USD | GDP Price Index Q4 F | 2.40% | 2.40% | | 12:30 | USD | Goods Trade Balance (USD) Feb P | -134.6B | -155.6B | | 12:30 | USD | Wholesale Inventories Feb P | 0.70% | 0.80% | | 14:00 | USD | Pending Home Sales M/M Feb | 0.90% | -4.60% | | 14:30 | USD | Natural Gas Storage | 37B | 9B |
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