Heading into Trump's announcement last night, George Saravelos, Global Head of FX Research at Deutsche Bank, warned the broader the tariffs, the more negative the effect is likely to be on the US (less scope for re-direction of trade and greater inflation pass-through) and by extension US risk assets, recession probabilities and ultimately the USD.
The outcome - judging from the panicked reaction across markets overnight - was worse than expected: higher and broader tariff levels taking almost immediate effect.
However, as Saravelos writes this morning, the details matter when considering FX moves.
