Yen - a safe haven for investors

The Japanese currency (yen) rose yesterday in foreign markets as investors fled to safe haven currencies a day before US President Donald Trump's planned tariffs take effect, according to Reuters.

Investors see the Japanese currency as a safer asset than the dollar in the current environment, as US tariffs are likely to also affect the US economy.

Financial markets were quiet at the start of yesterday's session, with the dollar and the euro close to Monday's levels, according to the quoted source.

The dollar fell 0.52% to 149.15 yen, while the euro depreciated 0.8% to 160.85 yen. Meanwhile, the Dollar Index, which measures the US currency against six major currencies (the euro, yen, pound sterling, Canadian dollar, Swedish krona and Swiss franc), rose 0.1% to 104.32 points.

Trump announced on Sunday evening that all countries will face new tariffs on their exports to the US starting April 2, but did not provide details. Previously, the US official had announced 25% tariffs on European goods.

According to the Washington Post, the White House has developed a proposal to impose tariffs of about 20% on most imports into the United States.

"We expect a delay of about a month in the implementation (of the tariffs), which would leave time for negotiations," said Claudio Irigoyen, head of the global economics division at Bank of America.

European Commission President Ursula von der Leyen recently said that the EU is open to negotiations with the US on trade, but will respond firmly if necessary.

In this context, the euro fell 0.3% yesterday to $1.0788, after gaining 4.5% in the first three months of the year, recording its strongest quarterly performance since October-December 2022, mainly due to Germany's commitment to significantly increase tax spending.

"The risk that high tariffs disrupt trade and economic activity could offset any gains in federal revenue from the US that the Trump administration seeks to use to continue domestic policies," said Mark Haefele, global chief investment officer at UBS.

For his part, Francesco Pesole, currency strategist at ING, said: "We remain generally cautious about any rise in the euro/dollar rate on the back of tariff events, but we see risks to the downside, barring a significant surprise on the US data side."

• European and Canadian tourists have started to avoid the US

French hotel group Accor SA warned that advance bookings for the summer of 2025 from Europe to the US are down 25%, as travelers discouraged by President Donald Trump's measures aimed at combating immigration are heading elsewhere, Bloomberg reports, according to Agerpres.

The French company has seen a "quite sharp slowdown" across the Atlantic, Accor CEO Sebastien Bazin said yesterday in an interview with Bloomberg TV. This is an acceleration from the 18-20% decline recorded in the first 90 days of the year, Bazin said. Instead of the US, travelers are choosing to visit places like Canada, South America and Egypt, the Accor boss added, noting: "Most likely it's the anxiety of going to an unknown territory. Even if the cases of people being held at the border are, for the moment, the subject of jokes, they have nevertheless created negative comments, which are starting to be reflected in bookings. Today you don't need any negative comments."

Transatlantic travel has long been a cornerstone for airlines and travel companies, as it was one of the most profitable routes in the world. Now more and more companies are drawing attention to the fact that this link is under pressure, as American tourists tighten their belts and avoid Europe, and Europeans avoid the US for political reasons.

Virgin Atlantic Airways recently sounded the alarm about the decline in travel between the US and the UK. The announcement sent shares of carriers such as IAG SA, the parent company of British Airways, down.

On Monday, Air Canada also said that bookings for flights between Canadian and U.S. cities were down 10% for the April-September period, as Canadians began to avoid traveling to their neighbor because of the trade war. The travel ban is part of a broader boycott of American products in response to Trump's tariffs and his repeated statements that Canada should become part of the United States.