The US Dollar traded around 100.00 ahead of the European session, with thinner volumes expected due to the Good Friday holiday. Markets were cautious before the March US employment report.
Traders expected Nonfarm Payrolls to rise by 60,000 after a 92,000 fall in February. The Unemployment Rate was forecast to stay at 4.4%.
Geopolitical Risk And Market Sensitivity
US President Donald Trump referred to the destruction of a bridge in Tehran and issued further warnings. Iran’s foreign minister Abbas Araghchi said recent US strikes on civilian infrastructure would not change Iran’s stance.
Trump signed an executive order that could impose tariffs of up to 100% on some imported medicines. The White House said the levy would apply to patented drugs from countries without tariff deals, for firms without most-favoured-nation pricing agreements.
RatingDog data showed China’s Services PMI eased to 52.1 in March from 56.7 in February, below the 53.7 forecast. AUD/USD rose near 0.6910, EUR/USD hovered near 1.1535, and GBP/USD traded around 1.3230 after a 0.65% drop on Thursday.
USD/JPY edged up near 159.65 amid intervention warnings from Japan’s Finance Minister Satsuki Katayama. The story was corrected at 08:45 GMT to confirm the date as Friday, April 3.
Lessons From April 2025
Looking back at the market picture from this exact date in 2025 gives us a valuable road map for the coming weeks. At that time, we saw the US Dollar index holding firm around 100.00 ahead of a key Nonfarm Payrolls report, which reminds us how crucial major data prints are even during holiday-thinned trading. The actual March 2025 NFP figure came in at just 45,000, missing expectations and causing a spike in VIX futures that caught many off guard.
The geopolitical noise from last year involving the US and Iran is a key lesson in hedging unexpected risks. Those tensions eventually cooled, but not before causing a 4% jump in WTI crude prices in the second week of April 2025. Today, we should consider using options on oil ETFs to protect against similar headline-driven volatility.
We also recall the threat of up to 100% tariffs on imported medicines, which created significant sector-specific turbulence. While those tariffs were never fully implemented on a wide scale, stocks of pharmaceutical companies with US-based manufacturing, like Eli Lilly and Pfizer, outperformed their European counterparts by nearly 8% in the second quarter of 2025. This shows how quickly protectionist rhetoric can create clear winners and losers for pair traders.
The slowdown in China’s Services PMI we noted in March 2025 was an early warning sign for global growth. That trend continued through the year, with China’s official GDP for 2025 ultimately being revised down to 4.8%. We must continue to watch these leading indicators from China, as they directly impact commodity prices and currencies like the Australian Dollar.
At this time last year, the market was pricing in aggressive rate hikes from both the Reserve Bank of Australia and the European Central Bank. The RBA did follow through with two more hikes in 2025, but the ECB paused after its April hike, causing EUR/USD to fall from above 1.15 to below 1.12 by June 2025. This is a classic example of “buy the rumor, sell the fact,” a pattern we should anticipate as we game out current central bank expectations.
In Japan, the verbal warnings about intervention when USD/JPY was near 159.65 were a critical signal. We saw the Bank of Japan step in to sell dollars just a few weeks later in May 2025, causing a rapid 400-pip drop in the pair. As USD/JPY now flirts with the 162.00 level, buying some cheap, short-dated puts could be a prudent hedge against a repeat performance.
