The foreign exchange market is witnessing significant shifts as the US repo rates become more attractive, boosting bills appreciation expectations. Concurrently, the US Dollar's weakness offers support to the EUR/GBP pair. However, renewed tariff threats from US President Donald Trump introduce a broad risk-off mood, potentially limiting the risk-sensitive Pound Sterling. In parallel, gold continues its upward trajectory, printing another fresh all-time high at around $2,955.
Throughout Thursday's European trading hours, the EUR/USD pair regained momentum, nearing 1.0450. The sustained weakness of the US Dollar aids the EUR/GBP pair's performance. However, potential tariff threats and geopolitical tensions could cap EUR/USD's upside. The focus remains on US data releases and Fedspeak as traders anticipate further policy guidance.
The GBP/USD pair holds its ground above 1.2600 during the European session. Distinct dynamics are at play across the US, eurozone, and UK markets. Despite uncertainties stemming from tariff threats and global tensions, the euro and pound sterling show resilience against the US Dollar.
US President Donald Trump hinted at a possible trade deal with China, injecting a layer of unpredictability into market dynamics. Meanwhile, if US yields continue their decline, analysts expect gold prices to reach new all-time highs this week. The Fed's potential rate cuts, akin to anticipated actions in the UK, remain under scrutiny as they could further influence market movements.