On Tuesday, the GBP/USD currency pair maintained its position above 1.2350, reflecting market stability in the face of recent economic developments. Traders exhibited a cautious approach following the recent announcement by US President Trump, who imposed a 25% import duty on steel and aluminum. This move has led to a restrained outlook for the pair as market participants anticipate Federal Reserve Chairman Jerome Powell's upcoming testimony. Meanwhile, the EUR/USD pair managed to secure minor gains, hovering above 1.0300, though its momentum remained limited due to investor wariness.
The introduction of these tariffs occurred late Monday night, and global stock markets showed resilience by initially brushing off associated fears. However, by Tuesday morning, both the S&P 500 and the Eurostoxx 50 indices were poised for lower openings, signaling a broader apprehension among investors. The financial markets were characterized by a prevailing tone of caution as stakeholders awaited further details on President Trump's reciprocal tariff plan.
Gold experienced a downward correction from its record high of $2,942 during the Asian session on Tuesday, settling around $2,900. This decline was attributed to a modest improvement in risk sentiment that prompted some intraday profit-taking among investors. Despite this, gold's price remains elevated as market participants closely monitor unfolding economic events.
The focus now shifts to Federal Reserve Chairman Powell's testimony, which is expected to provide insights into monetary policy and influence market dynamics. Investors remain on edge as they anticipate potential ramifications arising from the new tariff measures and seek clarity on future economic policies.