The financial world is keenly observing as President Donald Trump's trade policies continue to ripple through global markets. In the early days of his administration, Trump launched a trade war that has raised fears of an impending economic slowdown in the United States. Investors and analysts are particularly concerned about the potential repercussions of tariffs and how these could impact the U.S. economy and beyond.
The U.S. Department of Labor recently published the Job Openings and Labor Turnover Survey (JOLTS), revealing that job openings totaled 7.74 million at the end of January. This figure surpassed expectations of 7.63 million but fell short of December's 7.508 million, reflecting mixed signals in the labor market. Meanwhile, the U.S. Dollar remains under pressure amid looming recession fears, exacerbated by President Trump's tariffs.
In the currency markets, the EUR/USD traded at fresh multi-month highs above 1.0900 during the American session on Tuesday. The Euro benefitted from positive news regarding Germany’s Greens, who predicted a spending deal this week, providing a boost to the currency.
Ontario Premier Doug Ford has not held back in his criticism of Trump's trade policies. He stated that if a recession occurs, "there’s one person to be blamed." Ford also mentioned he would consider halting electricity exports to the U.S. should the trade conflict persist, signaling potential diplomatic tensions.
Gold (XAU/USD) traded with a positive tone on Tuesday, pressuring the upper range amid a vulnerable U.S. Dollar. The daily chart for XAU/USD suggests that buyers are regaining confidence, although further advances remain unconfirmed. Support levels for XAU/USD stand at 2,906.70, 2,893.35, and 2,881.80.
The market's attention is now turning toward the upcoming release of the February Consumer Price Index (CPI) figures on Wednesday. This data will provide further insights into inflation trends and could influence investor sentiment regarding future monetary policy decisions.
Adding to market anxieties, Trump instructed Secretary of Commerce Howard Lutnick to levy an additional 25% tariff on all steel and aluminum imports from Canada, escalating the total levy to 50%. Such moves have heightened market volatility and driven investors to consider safe-haven assets like gold.
The ongoing trade tensions have also caused concern among investors who fear a potential economic fallout. These fears continue to weigh on the U.S. Dollar while offering support to XAU/USD as traders seek refuge in traditionally safer assets.
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