In a significant development, the financial markets are experiencing heightened volatility as a result of recent economic actions taken by former U.S. President Donald Trump. On Tuesday, Trump confirmed the imposition of a 25% import tariff on Canada and Mexico, triggering a market dip. The focus now remains on Trump's tariffs and Fedspeak as traders search for new momentum in the market amidst recession fears. This article refrains from offering investment advice and reflects the author's views, not necessarily those of FXStreet or its advertisers.
Amid the turmoil, the US Dollar faced a sell-off driven by concerns of an economic slowdown, despite escalating trade tensions. This has provided some respite to currency pairs such as EUR/USD and GBP/USD. EUR/USD picked up fresh bids, extending its gains above 1.0500 during the European session, while GBP/USD regained demand, reaching 1.2700 on Tuesday. Traders are keenly observing tariff updates and Fedspeak for fresh market impetus.
Adding to the market's uncertainty, the cryptocurrency market cap saw a dramatic decline. On Tuesday, it shed over $410 billion, losing more than 10% of gains previously booked following Trump's strategic reserve announcement. This sharp decline underscores the fragility in the cryptocurrency sector amid broader economic concerns.
Gold prices have responded positively to these developments. The precious metal built on its steady intraday ascent, touching a new daily high around the $2,918-2,919 region during the first half of the European session on Tuesday. This marks the second consecutive day of a positive move for gold, fueled by concerns over the economic impact of Trump's trade tariffs.
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