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(Bloomberg) — Financial markets, which have shown increasing insensitivity to tariff threats from the US, will face a test at the Monday open after President Donald Trump declared a 30% rate for the European Union and Mexico effective Aug. 1.

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Trump has ratcheted up trade measures, promising that more tariffs are coming to everyone from Canada to Brazil to Algeria and inviting trading partners to negotiate further. Despite warnings of complacency from the likes of JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, investors have so far behaved as if they’re counting on the US president to back down, having seen previous U-turns from his administration.

“Investors shouldn’t bank on Trump only bluffing with the 30% tariff threat on EU goods,” Brian Jacobsen, chief economist at Annex Wealth Management, wrote in an email. “That level of tariffs is punitive, but it likely hurts them more than the US, so the clock is ticking.”

Bitcoin (BTC-USD), which trades through the weekend, climbed to as high as $119,489 in early trading Monday, a fresh record high.

Currency markets suggested risk appetite is beginning to wane, with the dollar and Japanese yen edging higher against most Group-of-10 peers in early trading while the Australian dollar and euro led losses. The euro touched its strongest level against the dollar since 2021 this month as investors assessed the region’s relative growth prospects. Meanwhile, the Mexican peso set a one-year high of 18.5525 versus the dollar on July 9.

President Trump and his allies’ criticism of Jerome Powell’s handling of the expensive renovation of the Fed’s headquarters — with some administration officials building a case to remove Powell from the Fed’s Board of Governors — may also weigh on markets at the start of the week.

Deutsche Bank AG strategist George Saravelos said the potential dismissal of Powell is a major and underpriced risk that could trigger a selloff in the US dollar and Treasuries.

“If Trump were to force Powell out, the subsequent 24 hours would probably see a drop of at least 3% to 4% in the trade-weighted dollar, as well as a 30 to 40 basis point fixed-income selloff, Saravelos said.

The greenback and bonds would carry a “persistent” risk premium, he said in a note, adding that investors may also grow anxious about the potential politicization of the Fed’s swap lines with other central banks.