The US Bureau of Economic Analysis is poised to release the Personal Consumption Expenditures (PCE) Price Index data for January this Friday at 13:30 GMT. Analysts are closely monitoring the core PCE Price Index, excluding volatile food and energy prices, which is projected to rise by 0.3% on a monthly basis. With both German and US inflation data awaited, market participants remain on edge.
In the European session on Friday, the Pound is trading near 1.2600 against the US Dollar. The uncertainty surrounding tariffs imposed by US President Donald Trump continues to weigh on the risk-sensitive Pound, bolstering the safe-haven appeal of the US Dollar. This ongoing geopolitical concern has shifted investor focus squarely onto the upcoming US PCE inflation data.
Meanwhile, gold has lost its status as a tariff safe haven, further heightening demand for the US Dollar. Concurrently, US yields are experiencing a decline, contributing to market fluctuations. The EUR/USD currency pair trades near 1.0400 in European trading on Friday, reflecting market apprehension.
President Trump confirmed that 25% tariffs on Canada and Mexico are set to be implemented on March 4. Additionally, he announced an extra 10% levy on Chinese imports, adding to the existing 10% tariff imposed in February. These developments have intensified market volatility and kept traders focused on inflation indicators.
Despite upbeat German Retail Sales and Import Prices data, the Euro remains unimpressed, failing to gain significant ground. Investors are waiting for clearer signals from the PCE inflation data release to gauge market direction.