In a turbulent week for currency markets, the US Dollar's resurgence, spurred by US President Donald Trump's ambiguous stance on tariffs, has left the GBP/USD and EUR/USD struggling in Thursday's European trading. The GBP/USD pair remained subdued below 1.2700, while the EUR/USD sustained losses below 1.0500. Market participants are keenly watching the European Central Bank (ECB) Minutes, the US GDP revision, and further statements from President Trump for insight into future movements.
The US Dollar's strength is attributed to Trump's mixed messages during a cabinet meeting on Wednesday, where he left markets uncertain about which countries would face tariffs and the timeline for these measures. This uncertainty has compounded the cautious mood in the markets, placing downward pressure on both the GBP/USD and EUR/USD pairs.
Traders are also closely monitoring inflation trends across the Eurozone, where disinflation appears to be spreading. Despite this trend, prices in the services sector continue to rise rapidly in France and other Eurozone countries. February's inflation figures are expected to show some easing, particularly in France, where a significant reduction in regulated electricity prices has been noted.
In addition to currency pairs, other markets have felt the impact of the strong US Dollar. Gold prices have experienced a sharp decline, hitting a ten-day low near $2,880 on Thursday, as the precious metal faced persistent selling pressure. This decline reflects broader market apprehensions fueled by Trump's tariff-related comments and upcoming US macroeconomic releases.
The EUR/USD pair has been particularly sensitive to US macro releases and President Trump's statements. The pair's downward trajectory was accentuated by Wednesday's cabinet meeting, which cast doubts on the tariff policy's specifics. As traders await key economic data and further clarification from Trump, the pair's performance remains under scrutiny.