President Trump's initial weeks in office have captured global attention, with markets reacting to his administration's policies. Analysts have raised the possibility of the European Union becoming Trump's next target for tariffs, as the administration continues to shape its trade strategy. Meanwhile, President Trump appears to wield less influence over China compared to the first trade war, potentially affecting future negotiations.
In financial markets, a risk-on environment necessitates caution for bulls due to an overbought Relative Strength Index (RSI). Investors are closely watching the Federal Reserve's rate cut bets, which have been undermining the US Dollar while providing support to the XAU/USD pair. The GBP/USD pair, too, has seen momentum, extending above 1.2500 during the European session.
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As market participants assess these developments, attention turns to upcoming US economic data releases, including ADP employment and ISM PMI figures. Sustained US Dollar weakness, influenced by uncertainties over potential Trump tariffs and anticipated Fed rate cuts, continues to support various currency pairs. Gold prices have also attracted safe-haven flows, driven by concerns surrounding President Trump's trade tariffs.