President Donald Trump addressed Congress late on Tuesday, downplaying the potential negative effects of his latest round of tariffs set to take effect on April 2. In his speech, he reassured lawmakers, stating:
"There'll be a little disturbance, but we're okay with that. It won't be much." – President Donald Trump
Simultaneously, market analysts are closely watching the European Central Bank (ECB), which is widely expected to announce a 25 basis points interest rate cut on Thursday. This decision could have significant implications for global financial markets.
The U.S. economic landscape continues to show mixed signals. The ADP Employment Change report revealed that the private sector added 77,000 new positions in February, indicating a moderate expansion in job creation. Meanwhile, the ISM Services Purchasing Managers' Index (PMI) jumped to 53.5 in February, reflecting growth in the services sector.
In the commodities market, the XAU/USD pair is trading near a fresh weekly high of $2,929.65. The pair is advancing above all its moving averages, with the 20 Simple Moving Average (SMA) providing near-term support at approximately $2,906.25. The Momentum indicator remains around its 100 level, suggesting a stable momentum in gold prices.
The daily chart for XAU/USD demonstrates that it trades around its daily opening, with an intraday dip quickly reverted, indicating that buyers are taking advantage of any declines. These movements in gold prices are drawing attention amid the current economic uncertainties.
In a related development, U.S. Commerce Secretary Howard Lutnick suggested that the Trump administration might consider reducing or even rolling back tariffs on the two neighboring countries. Such a move could potentially ease trade tensions and impact market dynamics.
As traders and investors digest these developments, it's important to note that neither the author nor FXStreet are registered investment advisors. This article is not intended to serve as investment advice but rather to provide an objective overview of recent events affecting financial markets.
The ECB's anticipated rate cut decision on Thursday will likely be a focal point for market participants. A reduction in interest rates may influence currency valuations and investor sentiment across Europe and beyond.
While President Trump's comments aimed to reduce concerns about tariffs, market reactions will continue to evolve as more details emerge about potential tariff adjustments and their implications for international trade relationships.