The US Dollar experienced further depreciation on Tuesday, driven by the ongoing narrative surrounding US tariffs and potential retaliatory measures by China. This development has sent ripples across global markets, influencing currency pairs and commodity prices. The EUR/USD pair reversed a six-day losing streak, advancing toward the key 1.0400 mark, while GBP/USD continued its upward momentum, testing the boundaries of the 1.2500 barrier. Meanwhile, President Donald Trump's decision to delay the 25% tariffs on Canada and Mexico by one month has also played a significant role in shaping market dynamics.
In the currency market, the Euro gained traction against the US Dollar, following six days of losses. This surge propelled the EUR/USD pair to approach the critical 1.0400 threshold. Simultaneously, the British Pound capitalized on the persistent weakness of the Greenback, with the GBP/USD pair revisiting the crucial 1.2500 level. The Australian Dollar also staged a recovery from Monday's multi-year lows against the US Dollar, showcasing resilience amid uncertain market conditions.
Additionally, the USD/JPY pair exhibited a fluctuating performance, reversing Monday's retracement to revisit the 155.50 zone. The US Dollar Index (DXY) struggled to regain upward momentum, maintaining its position above the 108.00 barrier due to ongoing tariff concerns and elevated US yields. With several Federal Reserve officials, including Jefferson, Barkin, Goolsbee, and Bowman, scheduled to speak, market participants remain attentive to potential monetary policy signals.
In other financial developments, Bitcoin's price declined by nearly 3%, trading below $100,000 during the early European session on Tuesday. The ongoing US-China trade tensions are contributing to increased volatility in risky assets such as Bitcoin. Meanwhile, gold prices soared to an all-time high of approximately $2,840 per ounce troy, driven by the Dollar's retreat and uncertainties surrounding Trump's tariff strategy. Silver followed suit, surpassing the $32.00 per ounce mark for the first time since mid-December.
Oil markets witnessed a notable recovery as WTI prices rebounded after reaching new lows near the $70.00 mark per barrel. Despite initial setbacks, WTI concluded the day with modest gains, reflecting resilient demand and market adaptation to prevailing challenges.
On the economic data front, attention is focused on the release of key indicators. The final S&P Global Services PMI is anticipated to provide insights into economic performance, while Germany and the euro area's final HCOB Services PMIs await publication. Additionally, Producer Prices within the eurozone and a speech by ECB's Lane are slated for release, potentially influencing market sentiment.