In a week dominated by trade tensions and economic uncertainty, global markets are closely watching the interplay between the US, China, and other international players. On Monday, markets reacted positively to news of a one-month delay in US tariffs on Canada and Mexico, spurring a rebound in stocks and a sell-off of the US Dollar. However, the relief was tempered by escalating tensions between the US and China, as both countries imposed new tariffs, fueling fears of a prolonged trade war.
The US Dollar remains under pressure, as it grapples with renewed demand as a haven currency. In response to aggressive rate cut bets by the Reserve Bank of Australia (RBA), the Australian Dollar is facing downward pressure. Meanwhile, rebounding US bond yields and a modest uptick in the USD are impacting commodity gains. The EUR/USD also trades with significant losses near 1.0300, reflecting the pervasive uncertainty affecting global markets.
As President Donald Trump marks two weeks at the White House, his tariffs on China have sparked a retaliatory response from Beijing, intensifying trade war concerns. This development has caused fluctuations in market sentiment, with investors increasingly wary of potential US tariffs on the Euro area. The growing concerns about inflation, coupled with trade tensions, continue to lend support to XAU/USD.
The story of US-China trade tensions is set to dominate the financial narrative throughout the week. Occasional attention will also be directed at the Bank of England (BoE) and the buildup to the Non-Farm Payrolls (NFP) report. While investors navigate this complex landscape, LMAX Group remains vigilant, reminding users that their platform is not a space for slander or promotion of any FX, Spread Betting, or CFD provider.
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