President Donald Trump has decided to postpone the implementation of 25% tariffs on imports from Canada and Mexico for one month, following discussions with his counterparts on Monday. Initially slated to take effect on June 10, the delay offers temporary relief for North American trade partners. Meanwhile, the European Union remains at risk of facing similar tariffs, which could have considerable repercussions for its economy.
The decision to delay the tariffs emerged from strategic conversations aimed at mitigating immediate economic disruptions. However, the specter of potential tariffs still looms over the EU, raising concerns about further economic strain. Amid these developments, the British pound has gained traction as a safe haven among pro-cyclical currencies, demonstrating resilience in the wake of avoiding a trade war in America.
The ongoing US-China trade war continues to inject volatility into global markets, impacting risky assets like Bitcoin. The conflict has already prompted Beijing to impose retaliatory duties ranging from 10% to 15% on US energy exports and farm equipment. As US tariffs on China come into effect today, China has responded with counter-tariffs, intensifying fears of an escalating trade war.
In the currency markets, developments in Europe and Asia are contributing to fluctuations. The Czech National Bank (CNB) announced a rate cut on Thursday, while Hungary is expected to face higher inflation next week, both of which are negative factors for local currencies. Meanwhile, eurozone flash CPI estimates for January came in slightly above expectations, adding another layer of complexity to the European economic landscape.
Turkey's inflation figures surprised analysts with an upward trend, while mixed Purchasing Managers' Index (PMI) numbers were reported across various sectors. Financial markets are keenly observing upcoming meetings of the National Bank of Poland (NBP) and CNB on Wednesday and Thursday, respectively, as their decisions could influence market dynamics.
Gold prices have stabilized after achieving record highs on Monday, coinciding with broader market uncertainty. The significant liquidation event on Monday, estimated at $8–$10 billion, far surpassed the initially reported $2 billion. This underscores the heightened sensitivity of financial markets to geopolitical developments and trade policies.