The US Dollar hovered near a three-month low on Wednesday as concerns over slowing US economic growth and the impact of tariffs weighed down the currency. The uncertainty surrounding US President Donald Trump's tariff policies contributed to volatility in currency markets. The GBP/USD pair saw mild gains, trading near 1.2790 during the early European trading hours. Meanwhile, the EUR/USD pair surged 1.4%, climbing 140 pips in a single session on Tuesday, as the markets anticipated potential policy reversals by President Trump.
Political uncertainty remains high, with questions about the new US administration, ongoing geopolitical tensions, and conflicts. Despite these challenges, higher tariffs in the US and elsewhere are unlikely to significantly alter the economic outlook in the short term. However, individual companies could face serious consequences due to these trade policies.
Gold prices maintained their position above the $2,900 threshold early Wednesday, snapping a two-day upswing from three-week troughs of $2,833. Traders are closely monitoring developments related to President Trump's latest tariff implementations and the US ADP Employment Change data for further direction in the gold market.
Looking ahead, economists forecast a normalization of growth rates, interest, inflation, and unemployment over the coming years. Many countries' economies appear balanced, barring any major shocks. Europe, including the Nordic countries, is expected to experience moderately higher growth, while the US may see slightly lower growth as interest rates, inflation, and wage growth stabilize.
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