Global Markets React as USD Struggles Amid Trade Policy Concerns

Global Markets React as USD Struggles Amid Trade Policy Concerns

The GBP/USD pair trades positively above 1.2900 on Tuesday, while the EUR/USD clings to daily gains near 1.0900 during European trading. Investors remain apprehensive about the potential economic fallout from US President Trump's tariffs, causing the US Dollar (USD) to remain under pressure. As a result, the USD struggles to recover, supporting XAU/USD. The sustained weakness of the USD aids in pushing these currency pairs higher.

The specter of a recession looms over the US economy, exacerbated by the Trump administration's trade policy concerns. Market sentiment appears to be on the mend despite these worries. Germany's Greens anticipate sealing a spending deal this week, which could bolster market confidence. Meanwhile, mid-tier US economic data is awaited ahead of the anticipated agreement.

Gold experiences a reversal in direction following Monday's decline and trades above $2,910 on Tuesday. The precious metal's upward movement is bolstered by the USD's ongoing weakness, with gold's appeal as a safe-haven asset gaining momentum amidst growing economic uncertainty.

The USD's struggle is further intensified by President Trump's tariffs, which continue to sow seeds of concern among investors. The tariffs' impact on global trade dynamics has placed additional pressure on the USD, making it difficult for the currency to regain its footing.

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