In a report released by Swissquote Bank Ltd, the financial landscape experienced a significant shift as the US dollar displayed volatility during the European session on Tuesday. The EUR/USD pair remained in negative territory, trading below 1.0400, while GBP/USD also faced bearish pressure, trading near 1.2250. The market fluctuations followed news of potential tariffs announced by former US President Donald Trump, which have heightened inflation concerns and influenced currency trading.
Swissquote Bank Ltd prepared the report for informational purposes, cautioning that it should not replace recipients' own judgment. The bank emphasized that the report does not constitute an offer to buy or sell any financial instrument. While the US dollar initially fell, it later rebounded, erasing losses against most major currencies following Trump's statement regarding possible 25% tariffs on Canada and Mexico starting February 1st. This announcement has prompted fears of inflationary pressures, which could lead to a tighter stance from the Federal Reserve.
The report noted that the views expressed might change without notice and could differ from those of Swissquote Bank Ltd personnel. Trump’s statement, famously encapsulated by his quote, "I have the best words," marked a pivotal moment in trading dynamics. This morning, inflation concerns due to tariff threats pushed the US dollar higher against various major currencies, with positive pressure expected to continue.
Additionally, data from the UK revealed an increase in the ILO Unemployment Rate to 4.4% for the three months leading up to November. This development further strained the GBP/USD pair as risk aversion and strong US dollar demand exacerbated its decline. The yen was one of the few exceptions in resisting the upward trajectory of the US dollar.