Psychology for major markets April 25th

EUR/USD – Retreated from 1.15 as Trump stepped back from threat to fire Powell, but remains well supported on expectations of damage to the US from tariffs, with IFO survey also showing resilience.

USD/JPY – Tested September 2024 lows on Trump attack on Powell and breakdown in US/Japan trade talks, but bouncing as threat of Powell sacking removed and volatility declines, favouring riskier currencies

EUR/GBP – Fairly steady at higher levels as equities stabilise

AUD/USD – Broke above key 0.64 level but has so far failed to build on gains. Clear break could open the way for progress into the high 0.60s.

Equities – Some stabilisation after initial bloodbath on US tariff increases but high US valuations still suggest scope for further declines longer term if tariffs cause significant US growth slowdown