Currency markets reacted sharply on Friday as tensions between the US and China deepened, dragging the FTSE 100 and European markets lower. The volatility followed a week of conflicting messages from US President Donald Trump over tariffs—culminating in an aggressive hike in import taxes to 125%. In response, China matched the levy and called on EU leaders to push back against what it described as US “bullying”.
Why Is This Happening?
This latest standoff is part of a broader trade war narrative that’s been building for years, but has intensified dramatically this week. China’s president Xi Jinping has urged European unity against the US’s unilateral tariff decisions, warning that "going against the world will only lead to isolation". With China raising import tariffs from 34% to 84%, and now to 125%, and Trump doing the same, FX markets are moving in anticipation of the economic fallout this could bring.
What Should We Expect?
Traders should be prepared for continued market turbulence. Currencies closely tied to trade—like the US dollar, Chinese yuan, euro, and commodity currencies such as the Australian and Canadian dollars—are likely to remain highly sensitive to news headlines. Safe havens like the Swiss franc and Japanese yen may also see increased demand during periods of uncertainty. With interest rates and inflation already at the forefront of trader focus, this renewed trade war could trigger short-term price swings and longer-term shifts in sentiment.
For FX Traders: Opportunity in Volatility
Now is a prime time to be actively trading FX. Global uncertainty and sharp price movements mean more opportunities to capitalise; especially for traders with the right tools and strategies. Unlike equities, FX markets react immediately to breaking news, allowing traders to take advantage of short-term trends and momentum. Whether you trade part-time or full-time, this market environment can be highly rewarding when approached with discipline and a proven trading plan.
At Trendsignal, we’ve helped thousands of traders do exactly that. Based at the Cranfield University Technology Park and backed by over 20 years of experience, we provide a complete trading solution; combining expert coaching, easy-to-follow strategies, and cutting-edge software to help you trade with confidence, not emotion.
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For Investors: Time to Diversify?
While long-term investors may be more accustomed to weathering volatility, the current tariff tensions underscore the importance of diversification. Equities across Europe are struggling to hold gains, and continued geopolitical disruption could put further pressure on growth and corporate earnings. With traditional assets becoming more sensitive to global headlines, many investors are turning to FX as a way to hedge and diversify their portfolios.
FX trading isn’t just for day traders—it can also be a strategic tool for investors looking to actively engage with market movements and preserve capital during unstable periods. Trendsignal’s education-led approach is ideal for those new to FX, offering step-by-step guidance and support every step of the way.
Whether you’re an investor or a trader, now is the time to learn how FX could enhance your financial strategy. Join our free webinar and discover how our structured, rules-based approach is helping people like you take control of their financial future.
Conclusion: Why Trading FX Now Makes Sense – and How Trendsignal Can Help
There’s never been a better time to be active in the FX market. At Trendsignal, we’ve spent over 20 years helping everyday people trade the markets confidently and successfully. Based at the Cranfield University Technology Park, we specialise in providing clear, rule-based FX trading strategies, expert coaching, and powerful software that helps you cut through the noise and focus on high-probability opportunities.
If you're ready to take control of your trading and learn how to navigate markets like these with confidence, join our free trading webinar. Discover how our proven strategies are helping everyday people become successful, independent traders.
