The effective tariff rate on Chinese imports to the US has reached 145%, rising from 84% to 125%, with an additional 20% levy on fentanyl-related goods. These tariff increases come amid escalating tensions between the two countries.
Gold prices have surged to an all-time high of $3,219, supported by a weakening US Dollar and the ongoing trade conflict. The market conditions have made gold a preferred safe haven amidst heightened Fed dovish expectations.
Currency Movements Amid Trade Uncertainties
Meanwhile, the AUD/USD pair is trading near 0.6250, benefitting from a weakening dollar despite ongoing trade uncertainties.
Bitcoin fell below $80,000, even as the US Consumer Price Index showed lower inflation and President Trump initiated a 90-day tariff pause on some countries. Markets have seen volatility, with the Nasdaq surging by 12% following the announcement.
We’re watching the ripple effects of heightened trade measures between the US and China kick in across multiple sectors. With the effective tariff rate on Chinese exports scaling sharply—moving from 84% to a lofty 145%—it’s not just a headline-grabbing figure. It tightens the cost equation dramatically for American importers, especially with a 20% surcharge now layered onto fentanyl-linked shipments.
Gold’s spike to $3,219 isn’t surprising when you line it up against the mix of monetary and geopolitical stress. A softer US Dollar combined with renewed frictions has made bullion an attractive hedge, especially for portfolios shifting away from risk-on assets. Dovish whispers from the Fed have only added fuel, encouraging capital into more defensive positions. In turn, it reinforces a pattern many of us have seen before: when the cost of capital stalls and macro shocks take the spotlight, haven assets often rally.
We’ve noticed the Australian Dollar gaining against its American counterpart, now holding around 0.6250. That’s no anomaly. The weaker greenback has opened the door for relative strength in commodities-linked currencies, and there’s been speculation about how long US policymakers will tolerate its current trajectory. The Aussie’s movements, then, offer clues not just about market confidence in emerging economies, but about anticipated policy gaps ahead.
Impact Of Inflation And Trade On Digital Assets
Bitcoin’s drop below $80,000 raises questions too. You might assume that lower US inflation, based on the most recent CPI data, would extend the tailwinds for risk assets. Yet the reverse happened. Even with a temporary 90-day tariff relief targeting select partners, the tug-of-war between inflation pressures and trade shifts seems to weigh heavily on digital assets. The size of that reaction, however, may suggest that expectations had already been priced—and traders are now unwinding positions based on quieter macro signals.
The Nasdaq saw a 12% lift following the tariff pause, an unusually strong bounce. That sort of move implies that, for now, equity markets are interpreting the pause not as a reversal of policy, but a window of flexibility during an otherwise tight grip on trade. For us, that’s telling—because it underlines that responses aren’t based solely on data releases, but also on the tone and potential direction behind new administrative decisions.
In the next stretch, attention might lean towards how rates markets interpret these shifts. Options volumes and realised volatility point to recalibrations rather than new ranges. We’ve begun seeing demand pick up for directional hedges, particularly in short-duration contracts, which suggests that market participants are less concerned about long-term shifts and more focused on short, tradeable bursts.
With implied volatility widening on both asset and currency sides, upcoming data releases and any tweaks to monetary communication will likely shape near-term gamma exposure. This calls for tighter trade setups and careful management of correlation assumptions.
