The US Dollar retreated following tariff announcements by US President Donald Trump, creating a risk-averse market environment. Trump's decision to impose tariffs on imports from Canada, Mexico, and China significantly affected the currency market on Monday. The GBP/USD pair experienced a rebound, rising towards 1.2400 after hitting a two-week-low of 1.2250. Meanwhile, gold regained traction, climbing toward the record-high it set above $2,810 last Friday.
Trump's tariff decisions weighed heavily on the market atmosphere, prompting a shift towards less risky assets. The EUR/USD pair remained under bearish pressure, trading below 1.0300 as investors digested the implications of these announcements. Ahead of the US PMI data release, the US Dollar stood resilient but eventually succumbed to the broader market sentiment.
The GBP/USD pair's upward movement was largely due to the US Dollar's retreat amid the ongoing tariff concerns. Investors perceived the British Pound as a safer alternative, leading to its appreciation against the weakening Dollar. Gold also benefitted from the risk-averse market climate, with the XAU/USD pair pushing higher as investors sought safety in the precious metal.
President Trump's tariffs have sparked widespread uncertainty among market participants, leading to fluctuations across various currency pairs. The anticipation of US PMI data added another layer of tension, as traders awaited further economic indicators to assess the overall market trajectory.