In recent weeks, President Trump's administration has been under scrutiny, with analysts examining the potential economic impacts of his early decisions. The European Union now stands on edge as it is speculated to be the next target for Trump's tariff policies. Meanwhile, the US-China trade tensions are showing signs of resurgence, with Trump holding less leverage compared to the first trade war. These developments are causing ripples across global markets, affecting currencies and commodities alike.
The Pound Sterling is facing potential downward pressure amidst these geopolitical uncertainties. Market analysts expect the Bank of England to resume its policy-easing cycle soon. Speculation centers on the likelihood of the Bank lowering interest rates by 25 basis points, bringing the rate down to 4.5%. This anticipation has already impacted GBP/USD, which ended its three-day winning streak and was trading around 1.2490 during Asian hours on Thursday.
On the other hand, the ongoing US-China trade war has heightened demand for safe-haven assets. Gold, a traditional refuge in times of uncertainty, held its ground just below the record high it reached on Wednesday. The price of gold remains steady as falling US bond yields further bolster this precious metal's allure. Investors increasingly turn to gold amidst rising trade anxieties, reinforcing its status as a reliable store of value.
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