EUR/USD held its rebound above the 1.0400 level during European trading on Monday, reflecting a broadly positive risk sentiment in the market. The gold price saw an influx of buyers, moving away from over a three-week low near the $2,833-2,832 region touched last Friday. This modest uptick in gold prices comes as traders responded to upbeat Chinese PMI data and a general risk appetite in the financial markets.
The U.S. Dollar faced pressure amid renewed optimism for a potential truce in the Ukraine conflict. Efforts by the European Union to push for peace have buoyed market sentiment, though the timing of these measures remains uncertain. Meanwhile, GBP/USD managed to defend minor bids near 1.2600 during the European session, reflecting cautious optimism among investors.
On the geopolitical front, former President Donald Trump stirred markets last Thursday by indicating that the 25% tariffs on Canada and Mexico would be enforced once the one-month delay concludes next Tuesday. This announcement has capped further upside for EUR/USD as traders weigh potential impacts on trade and geopolitical stability.
In addition to geopolitical factors, monetary policy expectations continue to influence market dynamics. Traders are increasingly pricing in the possibility that the Federal Reserve will cut interest rates by a quarter of a percentage point twice by the end of this year. Such speculation adds another layer of complexity to currency and commodity markets.
It is important to note that this article is not intended as investment advice. The author and FXStreet are not registered investment advisors. For those interested in trading EUR/USD, a list of top brokers for 2025 is featured in this report.