EUR/USD rallied back to 1.0500 last week as Trump’s reciprocal tariff announcement didn’t evoke much fear. But he also warned that tariffs on autos are coming.
Trump announced sweeping reciprocal tariffs, but they appear to be delayed in implementation, allowing for time to negotiate; and that’s released some pressure from markets fearing even more near-term change.
U.S. CPI continues to incline but FOMC Chair Jerome Powell didn’t seem too concerned when speaking to Congress. The USD/JPY rally has continued, however, even with many other USD markets paring back.
The U.S. Dollar is center stage this week for the Wednesday CPI release, and Jerome Powell’s Humphrey Hawkins testimony is perhaps more important than normal given the backdrop between he and President Trump.
The tariff topic continues to dominate and after last week’s open following Trump comments on tariffs, traders should be on guard for more volatility into next week.
Gold saw considerable drama at the $2,000/oz level and now $3,000/oz is almost in the picture. Could that be a game-changer for gold prices?
Trump volatility is back and the USD has put in wide swings on the back of the tariff topic, and Europe still seems in the President’s crosshairs which could keep the DXY volatility flowing.
Gold bulls are back in 2025 and January was a green monthly bar following two months of pullback to finish 2024.
Gold bulls have been back at work so far in 2025 trade but to this point, they haven’t been able to push for a test of the 2800 handle in spot XAU/USD.
Stocks are clawing back losses from the weekly open even as the U.S. Dollar has bounced from a spot of support. The rest of this week is expected to be very busy on the macro front.
Gold has been on a rapid recovery since the Q4 pullback and that move is now testing a level that bulls had difficulty sustaining above back in October.
The USD is starting Trump’s term with a pullback, so far, and that’s helped to boost equity markets following last week’s massive SPX rally.
