As the global economy navigates through uncertain waters, market dynamics continue to shift. The timing of European Union measures remains unclear, adding to the volatility. Meanwhile, former President Donald Trump has announced that the 25% tariffs on Canada and Mexico are set to be enacted next Tuesday, casting a shadow over international trade relations.
The EUR/USD pair has managed to hold its rebound above 1.0400 early Monday. This stability is buoyed by Europe's renewed efforts towards peace in Ukraine and expectations of upcoming EU inflation data. In the backdrop, concerns about Trump's tariff plans and potential global trade wars bolster commodities, with gold prices gaining positive traction amid a modest US Dollar weakness.
Gold's ascent is further supported by a weakening US Dollar, which is under pressure from upbeat Chinese Purchasing Managers' Index (PMI) data. The robust Chinese economic performance has lifted risk sentiment across markets. Concurrently, the EUR/USD pair remains afloat, awaiting further cues from EU inflation data.
Moreover, the market is witnessing bets that the Federal Reserve will cut rates again, further undermining the US Dollar. These speculations have benefitted the XAU/USD pair, as gold becomes an attractive asset amidst falling interest rates.
The Euro has shown resilience, bolstered by Europe's diplomatic initiatives aimed at fostering peace in Ukraine. This has contributed to the currency's firming position against its counterparts.
The views and opinions expressed in this article are those of the authors. It is important to note that the article does not necessarily reflect the official policy or position of FXStreet or its advertisers. Furthermore, neither the author nor FXStreet are registered investment advisors, and this article is not intended to serve as investment advice.