The financial markets are poised for the release of the Personal Consumption Expenditures (PCE) Price Index data by the US Bureau of Economic Analysis. This key economic indicator for January is expected to be unveiled on Friday at 13:30 GMT. The core PCE Price Index, excluding volatile food and energy prices, is projected to increase by 0.3% on a monthly basis. As investors await this crucial data, German and US inflation figures are also in focus.
The Pound Sterling is experiencing downward pressure against the US Dollar, trading near 1.2600 during the European session on Friday. President Trump's tariff policies are casting a shadow over the market, pushing investors towards the safe-haven US Dollar. This increased haven demand is adversely affecting the GBP/USD pair, as geopolitical concerns further fuel uncertainty.
Meanwhile, the Euro is trading around 1.0400 in European markets. Despite positive German Retail Sales and Import Prices data, the Euro has struggled to gain traction. The upbeat data failed to counterbalance the market's apprehensions regarding inflation and tariffs, leaving the Euro under pressure.
Gold, traditionally seen as a safe haven during tariff disputes, is not currently fulfilling that role. Instead, the focus is on the US Dollar as US yields continue to decline. The confirmation from President Trump about locking in 25% tariffs on Canada and Mexico for March 4 and an additional 10% levy on Chinese imports have heightened market tensions.