Earlier USD gains were erased after ISM manufacturing contracted more than expected in March.
Eurozone inflation eased further in March, as was widely expected - hence the limited impact on the EUR.
GBP was weaker across the board after Chancellor Rachel Reeves told the Cabinet that US tariffs will impact the UK and the country will have to take a pragmatic approach.
In anticipation of today's tariff announcements, due at 4pm EST, FX trade had a fairly choppy day.
*Daily move - against G10 rates at 7:30am, 02.04.25
** Indicative rates - interbank rates at 7:30am, 02.04.25
All eyes on this evening's announcement from Washington (9pm UK time). A CNBC report yesterday suggested that blanket 20% tariffs are less likely than country-by-country rates or a tiered system. For all the noise from Trump about brandishing tariffs and potentially starting a trade war, it seems his real aim could well be to make room for negotiations. Scott Bessent spoke last night and said tariffs will be set at the highest they can go, in order to make countries countries take steps towards bringing them down. This echoed the sentiment that all of the commotion is just a strategy to prompt future negotiations.
Before the announcement, we have the ADP payroll report but if truth be told we expect trading to stay within the range of the last few days as we wait for the announcement from Washington this evening.
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