Latest news in brief: The EU, US, Dollar, Tech and Gold

Dollar Nosedives to 3-Year Low Amid Trade War Fears

The US dollar slumped to its weakest level against the euro since early 2022, falling to $1.138 as global markets continued reacting to President Trump’s unpredictable trade policies.

The dollar index, which measures the greenback against key global currencies, dropped below the symbolic 100 mark to 99.7. Sterling, the yen, and the Swiss franc all gained significantly.

Market strategist Francesco Pesole from ING declared, “We’re now clearly in the middle of a dollar confidence crisis.”

European shares remained slightly positive, with the FTSE 100 up 0.5% and Germany’s DAX gaining 0.6%, while Asian markets were mixed.

Germany Urges Caution Over EU Tariffs on US Tech

Germany has warned the EU not to target American tech giants with new tariffs in retaliation against US trade policies.

Finance Minister Jörg Kukies said many European businesses rely heavily on US digital services, making alternatives hard to find. “We must be nuanced,” he said, acknowledging that some sectors are easier to substitute than others.

EU Commission President Ursula von der Leyen had hinted at imposing digital levies if talks with Washington collapse.

EU: US Will Suffer More from Tariff War

The European Union believes the United States stands to lose more from the ongoing trade conflict than Europe itself.

EU Economy Commissioner Valdis Dombrovskis said on Friday the EU remains open to “mutually constructive solutions”, but warned of potential escalation—especially following the US's tariff increases on China.

Despite the pause on some tariffs, the US still applies a 10% levy on many EU goods, and 25% on cars, steel, and aluminium.

European Markets Hold Steady Despite Wall Street Sell-Off

European stock markets opened higher on Friday, shrugging off a major dip in US shares the day before.

The Stoxx Europe 600 rose 0.7% in early trading, with the FTSE 100 up by the same amount and Germany’s DAX climbing 1.1%. This came despite Wall Street’s S&P 500 plummeting 3.5% on Thursday amid recession fears and tariff tensions.

Gold Hits Record High as Dollar Weakens

As investor confidence in the dollar wanes, gold surged to an all-time high of $3,218 per ounce. The Swiss franc also spiked, reaching SFr0.814 against the dollar before easing slightly.

The dollar’s ongoing slide, sparked by US trade instability, drove demand for safe-haven assets. Barclays strategist Mitul Kotecha cited “policy uncertainty” and “liquidity concerns” as key factors.

Meanwhile, the euro climbed to $1.13, sterling edged up to $1.30, and the yen hit a six-month high against the dollar.

Bond markets also saw volatility, with US 10-year Treasury yields flat on Friday after a sharp rise the day before. In Asia, markets were mixed: Japan’s Topix fell 2.9%, while Taiwan and India gained more than 2%.

Sources: (BBC.co.uk, FT.com)