The EUR/USD pair found itself on shaky ground near 1.0450 on Tuesday morning in Europe. This shift comes amid a renewed demand for the US Dollar, driven by a risk-off sentiment permeating the markets. Rising US Treasury bond yields have also played a significant role in boosting the greenback's appeal among investors.
Gold, on the other hand, has attracted buyers for the second consecutive day. Concerns over a potential global trade war have fueled bets that the Federal Reserve would cut interest rates further, providing support to the non-yielding yellow metal. However, rebounding US bond yields alongside a modest uptick in the USD might limit gains for the XAU/USD pair.
In currency markets, the British Pound is facing its own set of challenges. The GBP/USD pair struggled to draw in buyers but managed to maintain levels above 1.2600 in Tuesday’s European session. Meanwhile, data from the UK revealed that the ILO Unemployment Change remained steady at 4.4% for the three months leading to December. This figure came in better than market expectations of 4.5%, offering some stability to the British currency.
Market participants are keenly watching German ZEW economic sentiment data and US-Russia talks, which could further influence market dynamics. These developments are crucial as they could dictate future currency movements and investor strategies.
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