The euro saw a significant rise against the US dollar in the Asian market on Friday, reaching a level not seen in over three years. This surge was attributed to investors shifting away from US assets due to the uncertainties caused by President Donald Trump's unpredictable trade tariffs. The EUR/USD pair climbed from the mid-1.09 range to as high as 1.1387, continuing the upward trend that started on Thursday when Trump decided to halt tariffs on all countries except China, which saw an increase to 145%.
In addition to the euro, other major currencies within the G10 group also strengthened against the US dollar, especially safe-haven options like the Swiss franc and the Japanese yen. By 4:40 a.m. CEST, the USD/CHF pair fell below 0.82, a level not seen since January 2015 when the Swiss National Bank abandoned its commitment to keeping the Swiss franc at a minimum of 1.20 against the euro. Simultaneously, the USD/JPY pair dropped to slightly above 143, marking its lowest point since September 2024. The US Dollar Index, which tracks the currency against several other foreign currencies, dipped below 100, its lowest level since July 2023.
During a briefing at the White House on Thursday, Trump expressed optimism about the changes in trade policies, stating that despite foreseeable challenges, the outcome would be beneficial. However, financial markets responded differently with a decrease in the US dollar value, a decline in Wall Street stocks, and continued pressure on US Treasury bonds. Investors seem to be moving away from US assets due to concerns stemming from the tariffs.
Furthermore, the weaker-than-expected US inflation data released by the US Bureau of Labor Statistics on Thursday might have also contributed to the decline in the US dollar, causing an increase in other major currencies. Market analysts predict more rate cuts by the Federal Reserve this year due to economic uncertainties, although officials are cautious due to potential inflationary impacts associated with the tariffs.
In a related development, gold prices have surged significantly by 8% since Wednesday as a result of Trump's decision to delay reciprocal tariffs. Gold, a traditional safe-haven asset, had experienced a decline earlier in the week as investors sold off holdings to cover losses in other risky assets. By 4 a.m. CEST, spot gold reached $3,218 per ounce, while COMEX gold futures hit $3,238 per ounce—both marking record highs.
According to reports, Chinese investors allocated $1 billion (€0.88 billion) to gold exchange-traded funds (ETFs) last week following Trump's tariff announcement. Additionally, the World Gold Council reported that global gold-backed ETFs reached a monthly peak of $345 billion (€305 billion) in March.