Global financial markets are currently navigating a complex landscape marked by unexpected shifts in asset behavior. Recent policy actions from the United States, particularly new tariff threats, have sent ripples across currency and commodity markets, significantly influencing the performance of the dollar, euro, gold, and oil.
The Dollar’s Retreat Amidst Tariff Tensions
The U.S. dollar recently experienced a notable decline against key currencies such as the euro, yen, and Canadian dollar. This downward movement was primarily triggered by fresh threats of 50% tariffs proposed by current U.S. President Donald Trump, specifically targeting Apple products and the European Union. Despite the prevailing environment of high interest rates and increased risk aversion, the dollar has shown an unexpected failure to act as a traditional safe-haven asset. This divergence from typical economic responses, where tariffs often bolster a currency, suggests growing skepticism about “American exceptionalism” and a broader erosion of confidence in U.S. assets.
Euro’s Strengthening Global Presence
In contrast, the euro demonstrated resilience, appreciating against the dollar even in the face of these tariff threats. Signals from the European Central Bank (ECB) continue to highlight the euro’s expanding role as a global reserve currency. Its share in worldwide reserves has already reached 20%, and experts, including MUFG Bank, suggest this proportion could increase further as global asset managers reassess their confidence in the U.S. economy. This structural appeal of the euro is growing despite economic challenges within Europe. Anticipation of additional ECB rate cuts in the coming months has also contributed to a decline in bond yields.
Gold Surges as a Premier Safe Haven
Gold recorded a substantial surge, gaining 2.2% per ounce and marking a significant 5.7% increase over the week. This robust performance was largely driven by escalating global trade tensions and the deteriorating outlook for negotiations involving Iran and the European Union. According to Citi Research, gold is reinforcing its position as a crucial safe-haven asset, with its strength expected to persist through the autumn and winter seasons. Citi estimates potential trading opportunities for gold within a range of $3,100 to $3,500 per ounce, contingent on geopolitical developments that could influence market sentiment and liquidity.
Oil Markets Conclude Week with Modest Declines
While experiencing slight gains on Friday, crude oil benchmarks, WTI and Brent, both ended the week with moderate overall losses of 1.5% and 1% respectively, following a period of considerable volatility. The market’s immediate focus is now on the upcoming OPEC+ meeting scheduled for June 1st. Discussions at this meeting will center on a potential increase in oil production by 411,000 barrels per day starting in July. The week’s market dynamics were also influenced by the breakdown of nuclear talks between the United States and Iran in Rome, alongside the renewed tariff threats, although further diplomatic engagements are anticipated.

Sophia Patel brings deep expertise in portfolio management and risk assessment. With a Master’s in Finance, she writes practical guides and in-depth analyses to help investors build and protect their wealth.