AUD/USD jumps to near 0.6350 as US Dollar plummets after Trump's tariff plan

• AUD/USD climbs to near 0.6350 as the US Dollar has plunged more than 2%.
• The US Dollar nosedives as Trump's reciprocal tariffs have stoked US recession fears.    
• The import duty by the US on China has increased to 54%.

The AUD/USD pair moves higher and advances toward the two-week high of 0.6350 in Thursday's European session. The Aussie pair strengthens as the US Dollar (USD) faces an intense sell-off, with traders becoming increasingly confident that the new suite of tariffs by President Donald Trump will lead to a United States (US) recession in the near term.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, is down more than 2% to near 102.00. This is the highest one-day correction seen in years.

On Wednesday, US President Trump unveiled his reciprocal tariff plan in which he announced a 10% baseline levy on all imports to the US, which will become effective from April 5. Additionally, Trump slapped different tariffs for each country, ranging from 10%-49%.

Market participants expect that the implementation of full-scale tariffs will stoke inflation and weigh on economic growth. Such a scenario will lead to stagflation in the economy, making the Federal Reserve's (Fed) job more complicated.

The impact of Trump's tariffs will also be significant on the Australian economic outlook, given that the US has increased the import duty on Chinese products by 34%. This has come in addition to the 20% levy already imposed by Trump for pouring drugs into the US economy. Deepening concerns over China's economic outlook weigh on the Australian Dollar (AUD), given Australia's significant dependence on exports to China.

Meanwhile, China has urged the US to roll back tariffs and warned of countermeasures to safeguard its own rights and interests.