In the first few weeks of President Donald Trump's administration, the global markets have experienced significant shifts. Traders and investors have turned their attention to potential new tariff targets, with the European Union emerging as a likely focus. This development has sent ripples through financial markets, affecting currencies, commodities, and broader economic expectations.
The EUR/USD pair has felt the pressure as expectations grow surrounding Federal Reserve and Bank of England policy divergence. On Thursday, the Euro depreciated after two days of gains, trading below 1.0400 during European trading hours. This decline coincided with a broad US Dollar rebound, further weighing on the EUR/USD pair. Traders are eagerly awaiting Eurozone Retail Sales data, which could provide additional insights into the region's economic health.
Meanwhile, in the commodities market, gold faced selling pressure on Thursday in Asia, snapping its recent winning streak. This came after gold reached an all-time high of $2,882.35 just a day earlier. The pullback reflects broader market dynamics, including US Treasury Secretary Bessent's revelation that President Trump aims to bring down 10-year yields rather than targeting Federal Reserve rate cuts.
In the currency markets, the British Pound also showed signs of weakness. The GBP/USD pair is trending downward, moving closer to the 1.2400 mark in the European session on Thursday. This movement aligns with expectations that the Bank of England will lower its key interest rate by 25 basis points to 4.50% following its February policy meeting.
Another critical aspect of the evolving market landscape is President Trump's diminished leverage over China compared to the first trade war. This shift in dynamics may influence how trade negotiations and tariff implementations unfold in the coming months.
It is essential to note that this article reflects the views and opinions of its authors and does not constitute official policy or position of FXStreet or its advertisers. Furthermore, this article is not intended to serve as investment advice, and neither the author nor FXStreet are registered investment advisors.