The global financial markets are on edge as the release of the December US Consumer Price Index (CPI) data approaches. The anticipation has sent ripples through various financial sectors, with the US dollar suffering a notable decline against major currencies. Concurrently, former President Donald Trump's promise to impose tariffs on US trading partners has added to the market's volatility.
In European trading on Thursday, the EUR/USD pair continued its downward trajectory, slipping below the 1.0300 mark. This decline is attributed to the dovish tone of the European Central Bank (ECB) Accounts, where a 50 basis points (bps) rate cut was considered. Similarly, GBP/USD traded at 1.2205, marking a 0.22% decrease during the session.
The US inflation report presented a mixed picture, further complicating the economic landscape. While the headline CPI saw an uptick for the third consecutive month, core CPI recorded a slight easing. This ambiguity has led to heightened expectations for a rate cut, which in turn has pressured the US dollar lower against many of its counterparts.
In the equities market, Algorand's price showed significant resilience, extending its gains and trading around $0.469 on Thursday. This follows an impressive rally of over 19% the previous day. Moreover, ALGO’s Real-World Asset (RWA) Total Value Locked (TVL) experienced a notable 34.6% increase, alongside a 64.5% growth in followers on platform X throughout the year.
Meanwhile, gold prices have edged higher for the third consecutive day, reversing initial weekly losses and surpassing the $2,700 level at the time of writing. This rise comes as investors seek safe-haven assets amid growing economic uncertainties.
The UK's economic recovery remains fragile as it barely emerged from negative growth for the first time in three months. The recent "tax and spend" budget announced by the government will introduce tax hikes in April, including an increase in employer National Insurance contributions, potentially impacting future economic performance.
Looking ahead, market participants are keenly awaiting upcoming US Retail Sales and Jobless Claims data. These indicators are expected to provide further insights into the health of the US economy and influence future monetary policy decisions.