In a dynamic European session on Friday, the EUR/USD exchange rate slipped below the 1.0400 mark following the European Central Bank's (ECB) announcement of a policy interest rate cut by 25 basis points. This decision, although anticipated by many, has influenced various market sectors. Concurrently, the price of gold surged to a new all-time high of $2,800, buoyed by ongoing geopolitical tensions and US President Donald Trump's threatened trade tariffs. Meanwhile, Bitcoin showed resilience, maintaining its position around $104,000 after an earlier rebound.
The ECB's decision to lower interest rates came as no surprise to market participants. Speculation had been rife following a notable cooling in Germany's regional inflation levels in January, which heightened expectations for monetary easing. This rate cut is seen as a strategic move to stimulate economic activity and combat subdued inflationary pressures across the eurozone.
Safe-haven assets, particularly gold, have experienced increased demand amid uncertain global economic conditions. The precious metal's upward trajectory is supported by heightened geopolitical tensions and President Trump's tariff threats, which continue to shape investor sentiment. As a result, gold prices hit unprecedented heights during the European session, with projections suggesting a sustained uptrend.
Simultaneously, the GBP/USD pair maintained a narrow trading range just above 1.2400. The pair's stability can be attributed to muted US Dollar price movements and a stabilizing risk sentiment among traders. Market participants remain attentive to President Trump's tariff rhetoric and are preparing for the upcoming release of US Personal Consumption Expenditures (PCE) data, which could further influence currency dynamics.
Bitcoin showcased its characteristic volatility earlier in the week when it bounced off its 50-day Exponential Moving Average (EMA) at approximately $98,800. Since then, the cryptocurrency has steadied around $104,000, reflecting a period of relative calm in the digital asset market.