Investors find themselves on the edge, anxiously awaiting further details on U.S. President Trump's reciprocal tariff plan and the impending testimony of Federal Reserve Chairman Jerome Powell. The financial landscape is fraught with tension as President Trump announced a 25% import duty on steel and aluminum, effective late Monday night. In response, global stock markets initially shrugged off tariff fears, but futures markets began to decline as the levies took effect.
The S&P 500 and Eurostoxx 50 indices are anticipated to open lower today, reflecting a pervasive tone of caution in the financial markets. This atmosphere of apprehension has impeded the momentum for many currency pairs, as investors exercise caution amidst these uncertain times.
Despite the turbulence, the GBP/USD pair remains steady, holding above 1.2350 in the latter half of Tuesday. Conversely, the precious metal sector faces pressure, with prices revisiting daily lows near $2,880 per ounce troy. This movement is attributed to persistent tariff-led safe haven demand, which continues to impact the market dynamics.
Meanwhile, the U.S. Dollar experiences a corrective move, influenced by the current market conditions. EUR/USD manages to cling to modest gains, maintaining a position above 1.0300 on Tuesday. The financial markets remain poised for potential shifts following Chief Powell's testimony, which is expected to have significant ramifications.