Inflationary pressures appeared to have eased in February, with France showing particular signs of relief. The government announced a cut in regulated electricity prices, hinting at a broader trend of disinflation across the region. However, prices in the services sector continue to rise rapidly in France and other parts of the Eurozone, presenting a mixed economic landscape. Amid these developments, the Forex market remains dynamic, with the GBP/USD pair trading below 1.2700 in European sessions on Thursday, weighed down by a strong US Dollar.
The cautious mood in global markets stems from US President Donald Trump's recent comments on tariffs, which have caused considerable confusion. During a cabinet meeting on Wednesday, President Trump cast doubts about the future of tariffs, adding to the uncertainty that has already gripped investors. This uncertainty is particularly evident as key US macro releases are anticipated, prompting traders and analysts to tread carefully.
Gold prices have also been affected by the prevailing market sentiment. On Thursday, gold faced strong selling pressure, further extending its correction to a ten-day low near $2,880. This dip reflects the broader cautious approach investors are adopting in response to the unpredictable trade policies expressed by President Trump.
The ongoing strength of the US Dollar continues to exert pressure on the GBP/USD currency pair. As investors seek safe havens amid market volatility, the Sterling remains suppressed beneath the 1.2700 level. This trend highlights the complex interplay between currency values and international economic policies.