The US Dollar faced mounting pressure, triggering a rally in the GBP/USD pair. Markets reacted to news that US President Donald Trump would not impose day-one tariffs, causing a stir in currency trading. As traders digested these developments, the GBP/USD struggled to gain traction initially, trading slightly below 1.2200 during the latter part of Monday. Meanwhile, the EUR/USD gathered bullish momentum, reaching a two-week high near 1.0400.
Monday's trading session was characterized by market nervousness ahead of US President-elect Donald Trump's inauguration. The uncertainty surrounding this significant political event dragged the GBP/USD pair lower, despite the generally weaker performance of the US Dollar. Market participants remained cautious, reflecting the apprehension over potential policy shifts under the new administration.
The absence of immediate tariff imposition by President Trump provided some relief to markets, easing fears of a swift escalation in trade tensions. However, this did not fully allay concerns, as evidenced by the GBP/USD pair's lackluster performance. The EUR/USD pair, on the other hand, seemed to capitalize on the broader weakness of the US Dollar, gaining momentum and trading at levels not seen in weeks.
It is important to note that this analysis is not intended as investment advice. The views and opinions expressed herein belong solely to the authors and do not necessarily align with FXStreet or its advertisers. Neither the author nor FXStreet is a registered investment advisor.
Market dynamics continue to be influenced by President Trump's policy stance and his known penchant for impactful statements, such as his quip, "I have the best words." Traders remain vigilant, assessing how such rhetoric might translate into policy actions that could further impact currency movements.