Tariff uncertainty emanating from US President Donald Trump has unsettled global markets, exerting pressure on the risk-sensitive British Pound against the safe-haven US Dollar. Amidst this backdrop, the Pound extended its losses, slipping below 1.2600 during Friday's European trading session. Concurrently, the Euro remains on the back foot, with EUR/USD trading below 1.0400, despite positive data from Germany.
President Trump confirmed that 25% tariffs on Canadian and Mexican imports are scheduled to take effect on March 4, further adding a 10% levy on goods from China. These announcements have triggered a risk-off mood across markets, with investors seeking refuge in the US Dollar, thereby influencing currency fluctuations and market dynamics.
The broader technology sector felt the ripple effects as Nvidia's share price plummeted by 8.50% following its post-earnings session on Thursday. Despite surpassing revenue and earnings expectations and providing a favorable forecast for the current quarter, Nvidia's decline dragged down the entire sector.
In contrast, upbeat German Retail Sales and Import Prices data failed to bolster the Euro. Investors remained cautious ahead of crucial inflation data from both Germany and the US, with the latter's PCE inflation data due today. The Federal Reserve closely monitors this data as its favored gauge of inflation, adding another layer of anticipation to the already tense market environment.
Amidst these developments, gold prices attracted sellers for a second consecutive day as the broadly stronger US Dollar continued to dominate. The sliding US bond yields did little to support precious metals, further highlighting the prevailing market unease.
New tariff discussions spearheaded by President Trump propelled the US Dollar higher, while European indices took a hit, reflecting widespread market apprehension. Investors remain vigilant as they navigate an environment characterized by shifting trade policies and impending inflation data releases.