Tariff wars again dominated market conversations, with Trump confirming tariffs would come into effect next week for Canada, Mexico and China. The President also confirmed that a 25% tariff on EU products is also in the pipeline. This has sent markets into a further round of turmoil. The US Dollar spiked higher, with the EUR tumbling to 1.0400, while the GBP fell to 1.2630. The turbulence in markets is not helped by the recent spike back in inflation, in both Europe and the USA. The important US PCE Indicator will be released tonight and is expected to show inflation has begun to rise once again.The rebound in the reserve punished the commodity currencies, with the AUD crashing back to 0.6250, while the NZD stumbled below 0.5650. Australasian economies have escaped the notice of the USA, in terms of the tariff wars, but this may be because trade is much more balanced. All eyes turn to inflation data out of Europe and the USA later today.
