Influenced by Trump's tariff policy statements, global market risk aversion quickly intensified. On March 31, U.S. President Trump stated that the United States would impose tariffs on all countries, although he also mentioned that some countries could negotiate agreements to avoid additional tariffs. However, according to The Washington Post, Trump is urging his advisors to take a more aggressive stance, which has caused further market concern.
The rise in risk aversion led to an increase in the Japanese yen's exchange rate. On Monday, the dollar fell sharply against the yen to 148.80, a drop of 0.72%. Meanwhile, due to last Friday's U.S. core inflation data exceeding expectations, the market is worried about the prospects of stagflation, pushing the yen up by 0.82%.
Ray Attrill, head of foreign exchange research at National Australia Bank, noted: “The latest U.S. economic data shows clear signs of stagflation, prompting investors to avoid risk assets and turn to safe-haven assets like gold and the yen.”
The price of gold also surged due to increased demand for safe-haven assets. On Monday, it once spiked to $3,105 per ounce, hitting a historical record. Although it subsequently fell back to $3,086.61, it remained at a high level and set new records for three consecutive trading days. The market fears that increased tariffs may further push up U.S. inflation, boosting the demand for gold as a safe haven.
Risk assets generally declined. The Australian dollar fell by 0.15% to $0.6281; the New Zealand dollar dropped by 0.35% to $0.5712. Meanwhile, investors turned to U.S. Treasury bonds, pushing the 10-year U.S. Treasury yield down about 6 basis points to 4.1960%, putting pressure on the dollar.
Driven by risk aversion, traditional safe-haven currencies like the Swiss franc and the yen were favored. The euro remained stable at $1.0840, while the pound rose by 0.17% to $1.2969.
Additionally, a UK government spokesperson stated that UK Prime Minister Keir Starmer had a "productive discussion" with Trump in a phone conversation on Sunday regarding a bilateral trade agreement. Although the pound did not experience significant volatility from this news, the market views it as a positive signal amid the current tariff uncertainty.
Foreign exchange market analysts pointed out: “The dialogue between Trump and the UK Prime Minister sends a positive message and helps stabilize some market expectations.” Currently, the market is closely watching for further details of U.S. tariff policies to assess their actual impact on the global economy and financial markets.
