The United States Bureau of Economic Analysis is poised to release the Personal Consumption Expenditures (PCE) Price Index data for February on Friday at 12:30 GMT. This is the most eagerly awaited data release these days and the consensus is for a 0.3% m/m and 2.7% y/y increases. With the release date fast approaching, all market participants will have their eyes peeled on this data. They’re particularly interested in how it will affect economic sentiment given the huge changes to tariffs started by former President Donald Trump.
What’s happening During Trump’s administration, administration officials by and large replaced tariff rates. Together, these changes increased the trade-weighted average tariff rate on all US imports by about 5.5 to 6.0 percentage points. These tariffs have raised the status quo level near to its highest since the second world war. The sentiment among experts is that these tariffs made a big splash at first. Their deterrent power is likely to diminish with time as global trade routes change.
In the currency markets, the EUR/USD pair continues to face heavy selling pressure, trading under the key 1.0800 level during the early Friday session. This joined movement arrives after the duo wasn’t able to capitalize on its previous day’s strong rebound. In the same manner, the GBP/USD exchange rate continues calm, moving about the 1.2950 level in the European trading session. The pair’s potential upside is limited by lingering uncertainty surrounding US President Trump’s tariff strategies.
As these economic dynamics play out, gold prices have exploded, achieving a new all-time high near the $3,100 level. The precious metal’s ascent is attributed to traders seeking refuge amid concerns over Trump’s auto tariffs and their potential impact on global trade sentiment. The dominant risk-averse sentiment in the markets is pushing investors into a safe-haven gold.
To that end, the global financial landscape continues to become more complicated. Lingering uncertainty around the state of Trump’s tariff plans is further weighing on market risk appetite. This bleak backdrop has eclipsed optimistic news from across the pond, where UK February Retail Sales data came in stronger than expected. As nifty as that news may be, it didn’t impact the scared money typical in the larger market. Investors continue to be concerned over potential changes to US trade policy.