The US dollar has been trading lower against all G10 currencies this week, reflecting the current uncertainties in global markets. In the European session on Friday, EUR/USD showed a bullish trend, moving toward 1.0500, spurred by upbeat preliminary PMI data from Germany and the Eurozone. Meanwhile, the Pound Sterling gained strength, supported by robust preliminary January PMI data from the UK, with GBP/USD extending its weekly uptrend to a two-week high near 1.2450.
The Federal Reserve has signaled that it requires clear evidence of economic weakness and more subdued inflation to consider further policy easing. This comes after the Fed's decision to cut interest rates by 100 basis points. The market's attention will soon shift to the upcoming economic data releases from the United States, with preliminary PMI figures for January set to be released at 14:45 GMT. These figures are anticipated to indicate another month of healthy growth in US business activity.
President Trump's trade policies remain a point of uncertainty affecting the US dollar. While his low-tax, light-touch regulation policies are expected to boost growth, his proposals for tariffs have caused concern. Specifically, Trump has suggested imposing 25% duties on imports from Canada and Mexico and a 10% tariff on all Chinese imports. This ambiguity in trade policies contributes to the dollar's current weakened state.
In contrast, the Euro has benefited from positive economic indicators in Europe. The preliminary PMI data from both Germany and the broader Eurozone indicated an expansion in private sector business activity in January, bolstering the currency. As a result, the Euro has seen a rise against the US dollar.
Cryptocurrency markets also witnessed movement, with Dogelon Mars (ELON) continuing its rally on Friday after experiencing an 18% surge throughout the week. This rally reflects a broader trend of investor interest in alternative assets amidst traditional market fluctuations.