USD gains on BRICS tariffs - global FX volatility spikes on trade war

The US dollar index surged 0.7% to 106.45 as escalating trade tensions drove risk aversion across global markets. New US tariffs targeting BRICS nations and key allies triggered widespread currency weakness, with emerging market currencies bearing the brunt of selling pressure. The Brazilian real fell 1.8%, while the South African rand dropped 2.3% against the greenback. Major currency pairs showed significant volatility, with EUR/USD declining 0.5% to 1.0420 and GBP/USD falling 0.4% to 1.2625 before recovering. Global equity markets retreated, with S&P 500 futures down 1.1% and European indices falling 1.3-1.5%. Safe-haven flows benefited the dollar and Swiss franc, while commodity currencies underperformed. Technical indicators suggest further dollar strength likely, with DXY targeting 107.00 resistance. Traders should prepare for continued volatility as markets digest the implications of renewed protectionist policies on global growth and currency flows.