Inflation in France appears to have eased in February, largely driven by a reduction in regulated electricity prices. This development provides some relief as disinflation becomes more prevalent across the Eurozone. However, traders remain on edge, closely monitoring the European Central Bank (ECB) minutes, the revision of US GDP figures, and speeches by US President Donald Trump for further market guidance.
In the currency markets, the GBP/USD pair struggles under the weight of a recovering US Dollar. The pair remains depressed below 1.2700 during European trading on Thursday. The recovery of the US Dollar is attributed to President Trump's inconsistent statements on tariffs, which have caused confusion and uncertainty. As a result, the broad strength of the US Dollar and a cautious market mood are placing additional pressure on the GBP/USD pair.
Despite the easing inflation in France, prices in services continue to rise swiftly both within the country and throughout the Eurozone. The ongoing increase in service costs adds complexity to the overall economic landscape, even as disinflation takes hold.
The gold market is also experiencing shifts, with prices drifting lower due to an uptick in US bond yields. This rise in yields is enabling the US Dollar to recover from a multi-month low, impacting commodities priced in the currency. Despite this, uncertainty surrounding President Trump's tariff strategies and fears of a trade war may provide support for the XAU/USD pair.
Market participants are eagerly anticipating key US macroeconomic releases, which could further influence market trends. Additionally, President Trump's ongoing discussions are expected to have significant impacts on market sentiment.