Daily Market Update

Markets down, Buck mixed in face of tariffs

March 27, 2025

The U.S. Dollar is trading in mixed ranges as markets digest the announcement of 25.0% tariffs on auto imports ahead of next week’s scheduled “Liberation” day.

Overview

With trade consuming all headlines, risk markets are down with automakers, particularly European brands, suffering major losses to their shares’ values. Meanwhile, the FX market is certainly a mixed bag with Mexican Peso taking the biggest hit against the Buck while peers such as the Euro and Pound Sterling are up. Most auto parts come from Mexico and Japan, but Yen remained unmoved. The Buck has made up almost 1.0% of its losses in the past nine days.

Data released this morning showed that Q4 Gross Domestic Product in the U.S. came in better than expected with the final reading registering at 2.4% vs. 2.3% pace of growth. However, Personal Consumption was downwardly revised from 4.2% to 4.0%. It is clear that 2024 was not a year of soft landings since the economy kept outdoing itself. Markets are struggling to find guidance now since “trade wars” tend to not be ideal for long-term business plans except adjusting pricing and gauging production cost increments. We will get to gauge inflationary pressures for consumers via the Personal Consumption Expenditures data from February.

 

What to Watch This Week…

  • U.S. PCE on Friday 8:30AM
  • U.K. GDP Q4 on Friday
  • Monex USA Online is always open

The complete Economic Calendar can be found here.

 

MXN ⇓

The Mexican Peso is still advancing for the month, having gained 1.5% of value over the dollar since the start of March, however, the tariff congestion is starting to affect all related to Mexico. While it seems that the neighbors to the south avoided some early pressures from the White House, recent blanket takes on levying tariffs are making for headwinds the country did not need after a slowdown in growth since the second half of last year. Later today at 3PM, central bankers at Banxico will announce their decision on monetary policy, which is expected to go ahead and reduce the main rate from 9.5% to 9.0%. Anything not being a 50 basis-points cut would be a big surprise and could boost MXN.

 

GBP ⇑

Pound has climbed this morning by over half a percent, erasing the losses seen following pessimism over the Spring Statement from the U.K. treasury. Chancellor of the Exchequer Rachel Reeves did present a cut to projected growth outlooks, but markets are responding positively to the official’s ability to exude confidence in managing spending. With inflation also tamed to some extent, there is a bit of a renewed sense of optimism behind British assets that could be further improved if Q4 readings tomorrow for GDP show good figures along with Retails Sales from February. Sterling has advanced by almost 3.0% thus far in March. 

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