The GBP/USD currency pair fell for the fifth consecutive session, trading below 1.2300, as global markets reacted to President Donald Trump's recent tariff announcements. The US Dollar gained momentum, driven by a shift in risk sentiment, prompting further declines in the pair. Meanwhile, US stock index futures dropped between 1.5% and 2.5% during the European morning on Monday, highlighting investor concern over potential economic impacts.
Mexico emerged as the top exporter, with $466.6 billion in trade reported by the US Census Bureau. The USD Index rose nearly 1% on the day, reaching approximately 109.50. The EUR/USD opened with a significant bearish gap and was last seen trading slightly below 1.0250, losing over 1% on a daily basis. As market participants brace for economic data releases, the ISM Manufacturing PMI for January is set to be featured in the US economic calendar later today.
President Trump announced on Saturday sweeping tariffs of 25% on Mexican and Canadian imports, alongside a 10% tariff on Chinese goods entering the United States. These measures resulted in the US Dollar strengthening most prominently against the Australian Dollar, further amplified by a 0.1% decline in Australian Retail Sales for December.
Gold prices retreated from their recent record high above $2,810, trading below $2,790 early Monday. In the cryptocurrency market, Bitcoin, Ethereum, and Ripple experienced significant downturns, closing below key support levels and crashing by 4.3%, 13%, and 12.6%, respectively.
In 2024, Mexico, China, and Canada collectively accounted for 42% of total US imports. In response to the US tariffs, Mexican President Claudia Sheinbaum announced retaliatory tariffs against the United States on Saturday. Meanwhile, in Europe, the core Harmonized Index of Consumer Prices in the Euro area is projected to rise by 2.6% on a yearly basis for January.
The negative trajectory of GBP/USD reflects the broader market sentiment influenced by geopolitical developments and macroeconomic indicators. The currency pair's consistent decline underscores investors' preference for the safe-haven US Dollar amidst heightened uncertainty.
US stock index futures experienced notable declines as European markets opened, with futures slipping between 1.5% and 2.5%. This trend indicates a cautious outlook among investors ahead of further developments regarding trade policies and economic performance.
Mexico's position as the leading exporter aligns with broader trade dynamics, particularly as President Trump's tariff measures target major trading partners. The USD Index's climb to nearly 109.50 signifies renewed investor confidence in the US Dollar's strength amid global economic fluctuations.
The Euro's decline against the US Dollar reflects broader pressures within the Eurozone economy. As the EUR/USD opened with a bearish gap, traders and investors remain attentive to forthcoming economic indicators for potential recovery cues.
President Trump's announcement of substantial tariffs represents a pivotal moment in international trade relations. The 25% tariffs on Mexican and Canadian imports and 10% tariffs on Chinese goods underscore a strategic shift in US trade policy aimed at addressing perceived imbalances.
The Australian Dollar's depreciation against its US counterpart highlights the currency pair's vulnerability to external pressures. Additionally, Australia's monthly Retail Sales decline exacerbates concerns over domestic economic stability.
Gold prices' retreat mirrors broader market trends as investors recalibrate their positions amidst global economic uncertainties. The precious metal's pullback from record highs underscores shifting risk appetites.
Cryptocurrencies faced acute sell-offs as major digital assets fell below critical support levels. Bitcoin, Ethereum, and Ripple's declines reflect broader market volatility and investor sentiment shifts in the digital currency space.
In response to US-imposed tariffs, Mexico's retaliatory measures mark a significant development in bilateral trade relations. President Sheinbaum's announcement signals Mexico's strategic approach to safeguarding its economic interests amidst escalating tensions.
The projected increase in the Euro area's core Harmonized Index of Consumer Prices underscores inflationary pressures within the region. This anticipated rise is set against the backdrop of evolving monetary policy considerations.