In a tumultuous day for financial markets, risk sentiment soured following a spate of US economic data suggesting a broad lack of strength. On Thursday, the GBP/USD pair turned sharply south, tumbling nearly six-tenths of a percent as bids retreated back into the 1.2600 handle. The Fiber pair is experiencing a weak technical stance, compounded by fresh threats of US tariffs on European goods, further weighing on the currency.
Adding to the financial upheaval, the EUR/USD also took a significant hit, dropping nearly nine-tenths of a percent. The currency slipped below the 1.0400 mark for the first time in almost two weeks. This decline comes as disinflation becomes more widespread. Inflation pressures have likely eased in February, particularly in France, where a marked cut in regulated electricity prices has been observed. Despite these developments, prices continue to rise rapidly in services across France and other parts of the Eurozone.
Meanwhile, in the cryptocurrency market, Litecoin defied bearish sentiment with an impressive surge. The digital currency's price skyrocketed 24% in the last 24 hours, as institutions continue to accumulate Litecoin ahead of a potential ETF launch. This accumulation could make it challenging for bears to force a near-term reversal below $120, showcasing a stark contrast to the broader crypto markets' bearish sentiment.
The US economy's flagging core inflation pressures and the extended uptick being observed have contributed to the souring risk sentiment. Disinflation trends are becoming more evident, causing concerns about future economic stability. In addition, the potential threat of new US tariffs on European goods is exacerbating market fears, adding pressure to both GBP/USD and EUR/USD.