21/04/2025 Daily Reports
Asian Markets Mixed as US Firms Ready to Report Earnings and FX Mayhem with Trump’s Trade War
- Asian shares traded mixed on Monday with the continued caution owing to the Easter holiday and as U.S. futures declined ahead of key tech earnings releases. Investors are nervous after the sudden spike in currency uncertainty fueled by U.S. President Donald Trump’s aggressive tariff announcements.
- U.S. multinationals increasingly are using longer-dated currency hedges — five years and beyond — to protect against exchange rate swings induced by policy uncertainty in trade and a weakening dollar. The 90-day tariff relief for everyone except China has failed to prop up FX markets, with the euro reaching a three-year high against the dollar.
- Higher hedging costs and recession fears are also compelling firms to lock in long-term protection. Meanwhile, commentary from SPI Asset Management warned that reputational damage to the U.S. from its trade policy is “real and not fading.”
- Market sentiment remains tenuous and CEOs are reported to be requesting clarity following a meeting with Treasury Secretary Scott Bessent, who emphasized a long-term view of markets and stability — underscoring heightened fears of financial disturbances in the future.
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Gold Hits Record High Amid Dollar Weakness & Trade Tensions
- Gold surged past $3,400/oz, reaching a new all-time high.
- The US Dollar fell to its lowest level since late 2023.
- President Trump openly criticized the Federal Reserve and floated the idea of firing Fed Chair Jerome Powell.
- Fed independence fears are rising — strategists warn this could shake market confidence and further boost gold.
- Trade war fears remain elevated as China warns countries against favoring US deals.
- Safe haven demand is driving massive flows into gold-backed ETFs — now seeing 12 consecutive weeks of inflows, the longest streak since 2022.
- Central banks continue to accumulate gold as part of their reserves.
- Goldman Sachs now forecasts gold may reach $4,000 by mid-2026.
- Silver gained 1%, platinum rose, while palladium slipped.
What’s Next?
- This breakout in gold reflects more than just technical momentum — it’s a reaction to deep systemic concerns: political pressure on the Fed, a weakening dollar, and growing geopolitical fractures.
- While bullish sentiment may continue, investors should remain cautious. When fear drives prices, volatility is rarely far behind.
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