In the early weeks of President Trump's administration, several critical economic shifts have emerged, with potential global impacts. Among these developments, the European Union may become Trump's next target in his ongoing tariff endeavors. Meanwhile, Trump's leverage over China appears diminished compared to the initial trade war, introducing new variables into the global economic equation. On the financial markets front, a risk-on environment suggests caution for bullish investors, as key indicators like the Relative Strength Index (RSI) hint at slightly overbought conditions.
In recent sessions, the GBP/USD currency pair has seen renewed interest, rising to surpass the 1.2500 level during the European market hours on Wednesday. Concurrently, expectations of a Federal Reserve rate cut have cast a shadow over the US Dollar, providing additional momentum for the XAU/USD pair. The ongoing weakness of the US Dollar, coupled with a positive shift in risk sentiment, continues to bolster the appeal of gold as a safe-haven asset amid concerns over Trump's trade policies.
Market participants are advised to keep an eye on forthcoming US economic data, including ADP employment figures and ISM PMI readings, which are anticipated to influence market dynamics further. Additionally, the EUR/USD has experienced modest gains, edging closer to the 1.0400 mark following Tuesday's trading activities.
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