The US dollar tumbled sharply Wednesday amid escalating US-China tensions, worsened by Nvidia’s stark warning about financial impacts from U.S. chip export restrictions. Additional sanctions targeting Chinese firms importing Iranian oil and White House pressure on allies to reduce economic ties with China further undermined sentiment.

Powell's Cautious Remarks Fuel Risk Aversion

Fed Chair Jerome Powell reinforced market caution, emphasizing significant downside economic risks and indicating no immediate halt to balance-sheet reduction. Cleveland Fed’s Beth Hammack echoed Powell, advocating policy patience amid mounting uncertainties. U.S. Treasury yields declined 3-5 bps amid rising safe-haven demand.

Euro, Swiss Franc, Gold Surge

Safe-haven currencies strengthened markedly, with gold surging over 3.5% to a fresh record high. EUR/USD rose above 1.1340, buoyed by safe-haven flows ahead of Thursday’s key ECB meeting, though strong resistance near 1.15 limited gains. Technical signals remain bullish, supported by moving-average trends.

Sterling Stable but Constrained by BoE Outlook

GBP/USD traded cautiously stable after softer-than-expected UK March inflation boosted bets on a 25 bps BoE rate cut in May. Gains remain capped near the upper Bollinger band at 1.3245, despite bullish technical crossover potential.

Yen Gains as Equity Markets Slide

USD/JPY fell significantly, settling near recent lows at the lower end of its trading range amid global equity weakness. Traders watch critical support at 141.65 closely for further bearish momentum cues.

Commodities Benefit from Dollar Weakness

Oil prices rose over 2%, supported by tightening supply and geopolitical risks. Copper climbed 1.4% on demand optimism, while gold’s 3.5% surge underscored investors' elevated anxiety.

Currencies at close: EUR/USD +1.03%, USD/JPY -1.01%, GBP/USD +0.07%, AUD/USD +0.38%, Dollar Index nearly -1%, reflecting heightened geopolitical uncertainty.