In a significant economic move, US President Donald Trump announced tariffs on imports from Canada, Mexico, and China over the weekend. The announcement, which aimed to protect domestic industries, had immediate repercussions on global financial markets. Notably, the US Dollar (USD) gained strength following the tariff declarations, causing ripples across various trading pairs and commodities.
The impact of the tariffs was felt strongly in currency markets. The GBP/USD pair experienced a decline for the fifth consecutive session, trading below 1.2300. This shift was attributed to the negative risk mood that bolstered the USD's appeal as a safe-haven asset. Similarly, the EUR/USD pair faced heavy bearish pressure, declining toward 1.0200 on Monday. Analysts suggest that the tariff-induced market sentiment contributed significantly to these trends.
The repercussions extended to the cryptocurrency market as well. Prices for Cardano and Solana continued to trade in red on Monday, after falling over 15% the previous week. The selling pressure on cryptocurrencies began on Saturday, following the tariff announcements. Market experts indicate that the imposition of tariffs by President Trump added to the existing volatility in the crypto space.
Gold also responded to the shifting market dynamics. After reaching a record-high price of above $2,810 on Friday, gold pulled back, trading below $2,790 early Monday. The strengthening USD played a crucial role in dragging XAU/USD lower, as investors moved away from gold in favor of the more stable dollar amid the souring market mood.