Market sentiment stays cautiously upbeat as hopes of a Trump tariff retreat compete with doubts about its benefits for US manufacturing. Mixed central bank signals and global tensions, including cyber drama with China, unrest in Ukraine, and the Middle East, keep traders on edge.
A CNBC survey warns tariffs may hurt US manufacturing by making reshoring too costly, while Fitch flags risks to APAC economies. Still, progress in US trade talks with the EU, Japan, and the UK offers a ray of optimism.
The US Dollar holds near a two-year low, Gold rebounds, and major currencies like EUR and GBP stay strong. USDJPY remains weak, while AUD and NZD gain ground. That said, USDCAD remains lackluster after stalling a three-day winning streak the previous day while Oil struggles to extend its rebound, cryptos stay flat, and equities inch higher ahead of Wednesday’s Fed Chair Powell’s speech and Thursday’s ECB decision.
EURUSD holds near its highest level since February 2022, steady after a pullback from a multi-year high. Similarly, USDJPY stabilizes at a six-month low, pausing its three-day drop.
Support for the Euro comes from a weaker US Dollar and trade optimism, with the White House citing “enormous progress” in EU talks and Trump pushing for a Japan deal. Meanwhile, the safe-haven Yen stays firm, backed by risk-off vibes and concerns from BoJ officials over market volatility driven by Trump’s tariffs.
GBPUSD climbs to its highest level since October 2024, supported by optimism over a US-UK trade deal and steady UK retail sales clues from the BRC. In doing so, the Pound shrugs off mixed UK jobs figures, economic concerns, and the BoE’s dovish outlook.
AUDUSD and NZDUSD extend their rallies to five-day highs, fueled by Trump’s softer tariff stance, trade deal hopes with China, and a weaker US Dollar, despite dovish RBA and RBNZ signals. Meanwhile, USDCAD struggles near a five-month low amid mixed US-Canada trade vibes, a dovish BoC outlook, and slipping crude oil prices.
Gold rebounds after a brief pullback, reclaiming momentum near record highs as a weak US Dollar and cautious sentiment support fresh demand. Meanwhile, WTI crude oil wobbles after a two-day bounce, pressured by OPEC’s warning that US tariffs may hurt global energy demand, ahead of the weekly US API inventory data.
Bitcoin (BTCUSD) and Ethereum (ETHUSD) struggle to defend the previous day’s gains as market sentiment dwindles amid tariff woes and easing Trump-inspired optimism. Adding to the pressure, the US SEC delays its decision on allowing Ethereum ETF staking, making crypto investors more cautious.
After a mixed UK jobs report, focus shifts to Germany and Europe’s ZEW sentiment, Canada’s inflation data, the US Empire State Manufacturing Index, and a speech by ECB President Lagarde. Weakening confidence in US tariff policies and rising geopolitical risks may lift the US Dollar, pressuring gains in major currencies, commodities, and crypto. Still, US recession fears could cap the Dollar’s rise, supporting safe havens like the Yen, Gold, and Swiss Franc.
May the trading luck be with you!
