The US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index data for January on Friday at 13:30 GMT. This release comes amid heightened anticipation in financial markets, with significant implications for trading dynamics. The core PCE Price Index, which excludes volatile food and energy prices, is projected to increase by 0.3% on a monthly basis. Meanwhile, German and US inflation data are eagerly awaited, adding to the market's tension.
In the foreign exchange market, the Pound is trading near 1.2600 against the US Dollar in the European session on Friday. Tariff uncertainties stemming from US President Donald Trump's policies continue to weigh on the risk-sensitive Pound. This pressure is compounded by increased demand for the safe-haven US Dollar, driven by geopolitical concerns.
President Trump's confirmation of 25% tariffs on Canada and Mexico set to take effect on March 4 further intensifies market anxieties. Additionally, he has announced an additional 10% levy on Chinese imports, adding to an existing 10% tariff imposed in February. These developments have contributed to a drop in US yields, reflecting an uncertain economic outlook.
In this environment, gold has lost its status as a tariff safe haven for now, with investors shifting their focus to other assets. The EUR/USD pair is currently trading near 1.0400 during European trading hours on Friday, reflecting broader market trends.
All eyes remain on the impending US PCE inflation data release, which investors widely regard as a key indicator of future economic conditions. The outcome of this report could influence market sentiment in the coming days.