Tariff impact continues to boost safe-haven currencies, with the Japanese Yen and Swiss Franc strengthening.

On Monday, the Japanese Yen and the Swiss Franc strengthened as traders continued to seek safe-haven assets. Earlier, US officials ignored trade tariff threats and stated that negotiations on any tariff cuts would be extended. As risk-off sentiment continued into the second week, the Japanese Yen rose by 1% against the US dollar, while the Swiss Franc rose by 0.7%. The Australian Dollar fell by 0.7%, marking the largest decrease among major developed market currencies. With little indication over the weekend that President Trump is willing to back down on the retaliatory tariffs imposed last week, the shift towards safe-haven assets persists. US Treasury Secretary Mnuchin stated that trade issues cannot be resolved through negotiations in a matter of days or weeks. Meanwhile, in early Asian trading, S&P 500 futures plummeted while US Treasury futures climbed. Australia is one of the most severely impacted countries as this small, open economy relies heavily on its trade connections. The Australian Dollar saw its largest drop since October 2008, and the Australian stock market also took a significant hit. Nick Twidale, Chief Analyst at AT Global Markets, stated, "If Trump continues with a hard-line approach, we will see more risk-off moves. Negotiations will take months, which is not good for global trade and may not meet investors' expectations of this administration." As the escalating trade war between the US and its partners raises concerns about a global economic slowdown and stagflation in the world's largest economy, investors are rushing towards safe-haven assets. On Friday, China's retaliatory tariffs on the US triggered spikes in the currency and stock markets, with the US stock market experiencing its largest decline since March 2020. Chris Weston, Head of Research at the Pepperstone Group, said, "President Trump and Treasury Secretary Mnuchin seem uneasy about the market reactions, and the market will test their resolve this week."