President Trump's initial weeks in office have sparked significant movements in global markets as traders and analysts examine the potential implications of his trade policies. The European Union has emerged as a possible target for Trump's next round of tariffs, raising concerns among investors and market participants. Meanwhile, Trump's leverage over China appears diminished compared to the first trade war, introducing new challenges in the evolving economic landscape.
Market indicators reveal a risk-on environment, though caution is advised for bullish investors due to a slightly overbought Relative Strength Index (RSI). In the currency market, GBP/USD has shown renewed demand, reclaiming the 1.2500 level during the European session on Wednesday. Concurrently, expectations of a Fed rate cut have weakened the US Dollar, providing additional support to the XAU/USD pair. This movement reflects a positive shift in risk sentiment and sustained US Dollar weakness.
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Upcoming economic releases, notably the US ADP and ISM PMI data, are anticipated to capture market attention. In response to recent developments, EUR/USD has edged higher, trading near 1.0400 after recording modest gains on Tuesday. Gold prices continue to attract safe-haven flows as concerns loom over potential trade tariffs from the Trump administration.
It is important to note that the views and opinions expressed in this article are those of the authors and do not reflect the official policy or position of FXStreet or its advertisers. As markets navigate these dynamic conditions, traders should remain vigilant and informed about ongoing geopolitical and economic shifts.