The financial markets are witnessing a rollercoaster ride amid global economic uncertainties, fueled by US President Donald Trump's tariff plans and resurgent US Dollar demand. As investors seek refuge in traditional safe-haven assets, gold prices have shown resilience, recovering from a one-week low. Meanwhile, the currency markets are experiencing significant fluctuations with EUR/USD and GBP/USD facing downward pressure. At the same time, the cryptocurrency market bears the brunt of Bitcoin's recent moves, affecting major altcoins like Ethereum and Ripple.
In the European trading hours on Wednesday, EUR/USD fell below the 1.0500 mark, influenced by a resurgent US Dollar. The renewed demand for the dollar coincides with an uptick in US Treasury bond yields and optimism surrounding Trump's tax plans. The US House's passage of the Republican Budget plan further bolstered the greenback, putting additional strain on the Euro. Similarly, GBP/USD erased its Asian gains, holding losses below 1.2650 during the early European session.
The cryptocurrency market is not immune to volatility either. Bitcoin, which recently broke out of its prolonged consolidation phase, reached a low of $86,050 earlier this week before stabilizing around $88,500 on Wednesday. The ripple effect of Bitcoin's decline was felt across other cryptocurrencies, with Ethereum and Ripple plummeting by nearly 11% and 12%, respectively.
Amid these market dynamics, gold remains a stable choice for investors seeking safety. The yellow metal's appeal as a haven asset is bolstered by uncertainty surrounding US economic policies. Gold prices have recovered some lost ground after touching a one-week low in the previous session.
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