In a tumultuous week for global financial markets, President Donald Trump's uncertain trade policies and the rise of China's artificial intelligence model, DeepSeek, have sent shockwaves across sectors. With the USD modestly strengthening, gold prices have plummeted to near one-week lows, while the NASDAQ index experienced a significant drop of over 3%. The rebounding US bond yields have bolstered the greenback, creating challenges for non-yielding assets like gold.
DeepSeek's surge in popularity in the US market has led to rapid declines in stock values and contributed to the volatility observed in the tech sector. The AI model, developed by several Chinese companies and recently made open-source, has caused a stir, affecting tech stocks globally. Meanwhile, the USD/JPY exchange rate has rebounded above the critical 155.00 psychological mark, adding further complexities to the financial outlook.
The release of service-sector inflation data from Japan has also played a role in shaping market dynamics. Bitcoin, influenced by DeepSeek's rising prominence, slipped below the $100,000 mark. Additionally, bets on a rate cut by the Reserve Bank of Australia (RBA), compounded by China's economic challenges, have pulled spot prices away from their one-month peak.
While the views expressed in this analysis do not represent FXStreet's official stance, they underscore the multifaceted factors currently influencing market conditions. As investors navigate these turbulent waters, attention remains focused on the interplay between US trade policies and the emerging influence of AI technologies.