Investors are fleeing U.S. assets due to tariffs, while the Euro has risen to its highest level in three years.

As investors divest from U.S. assets, the Euro has risen to its highest level against the U.S. dollar in the past three years amid market fluctuations caused by tariffs. Despite renewed selling on Wall Street, European stock markets are preparing to open higher.

On Friday during the Asian session, the Euro reached its highest level against the U.S. dollar in three years as investors continued to divest from U.S. assets amidst chaotic tariffs introduced by President Donald Trump. The EUR/USD pair rose from around 1.09 to 1.1387, extending gains seen since Thursday after Trump announced a halt to reciprocal tariffs applied to all countries except China, where he raised the tariff rate to 145%. Alongside the Euro, other G10 currencies also strengthened against the dollar, especially traditional safe-haven currencies like the Swiss franc and the Japanese yen. As of 05:40 GMT, the USD/CHF pair fell below 0.82, a level not seen since January 2015 when the Swiss National Bank abandoned its 1.20 peg to the Euro. Meanwhile, the USD/JPY pair dipped just above 143, its lowest level since September 2024. The U.S. Dollar Index, which measures the dollar against a basket of foreign currencies, also fell below 100, its lowest value since July 2023. During a statement at the White House on Thursday, Trump said, “There will be a transition cost and transition issues, but in the end, it will be something beautiful. We are in very good shape.” However, financial markets reacted in the opposite direction, with the U.S. dollar weakening further, renewed selling on Wall Street, and continued pressure on U.S. Treasury bonds. It appears that investors are fleeing American assets due to uncertainties arising from tariffs. On Thursday, the U.S. Bureau of Labor Statistics reported a cooler-than-expected U.S. inflation rate. This data may have contributed to the dollar's weakness, pushing other major currencies higher. Markets expect the Federal Reserve (Fed) to make further interest rate cuts this year due to economic risks, but officials reiterated that they remain cautious due to higher inflationary pressures associated with tariffs.

Gold prices reached record levels as U.S. Treasury bonds fell. Gold prices rose by 8% since Wednesday following Trump's decision to pause reciprocal tariffs for 90 days. The precious metal, long viewed as a safe haven, had declined earlier in the week as investors sold off assets to cover losses in other risk assets. As of 05:00 GMT, spot gold rose to $3,218 per ounce, while COMEX futures gold reached a record high of $3,238 per ounce. According to Bloomberg, Chinese investors poured $1 billion into gold exchange-traded funds (ETFs) last week since Trump announced high tariffs on China. Meanwhile, the World Gold Council reported that global gold-backed ETFs reached a monthly high of $345 billion in March. In contrast, U.S. Treasury bonds, traditionally seen as safe assets, continued to see selling on Thursday. Yields on 10 and 30-year Treasury bonds rose by 11 and 21 basis points, respectively. As bond prices fall, yields rise, reflecting the cost of government borrowing. The notable sell-off in long-term U.S. Treasury bonds since the beginning of the week indicates that investors are demanding higher risk premiums due to the deteriorating outlook for the U.S. economy.

Despite the selling on Wall Street, European markets are expected to rise. Following a historic rally, U.S. stocks resumed selling on Thursday. The S&P 500 fell by 3.46%, the Nasdaq by 4.31%, and the Dow Jones Industrial Average by 2.5%, indicating that market anxiety continues despite recent policy changes. Broader Asian markets largely moved in the same direction on Friday. As of 06:30 GMT, Japan's Nikkei 225 index fell by 3.9%, South Korea's Kospi index by 0.8%, and Australia's ASX 200 index by 1.3%. However, China's Hang Seng Index managed to rise by 0.6%. Despite a global risk-off mood, futures pricing indicates a higher opening for European markets. As of 06:30 GMT, the Euro Stoxx 50 rose by 0.57%, Germany's DAX by 0.61%, and the FTSE 100 by 0.49%.