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However, the Australian Dollar could find support from rising gold (XAU) prices. Gold surged to $2,940 per ounce after the US announced new tariffs. Geopolitical uncertainty has increased financial market volatility, driving demand for gold as a safe-haven asset. If gold prices continue to rise, they could offset some of the bearish pressure on AUD/USD, providing short-term support. Strong consolidation within volatile ranges is possible since AUD/USD remains at long-term support levels.
USD/JPY Volatility Rises Amid Tariff Tensions and Policy Shifts
US President Donald Trump’s decision to impose 25% tariffs on steel and aluminum also impacted the Japanese Yen (JPY), which induced trade war fears. This policy shift threatens Japan’s economic stability and limits the JPY’s upside. However, as a safe-haven asset, the Yen found some support amid rising global uncertainty.
Despite the JPY’s strength, modest USD gains supported USD/JPY. Investors expect Trump’s policies to boost inflation, which could delay Federal Reserve (Fed) rate cuts. The Bank of Japan (BoJ) signaled further interest rate hikes, which helped cushion the Yen’s downside. BoJ Governor Kazuo Ueda and Deputy Governor Himino confirmed the possibility of more hikes if economic conditions align with projections. BoJ board member Naoki Tamura suggested raising rates to 1% in the second half of the fiscal year, reinforcing a hawkish stance.
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