ForexLive European FX news wrap: Dollar steady as risk shrugs off Trump’s tariff threats

Headlines:

• Weekly update on interest rate expectations
• Gold Technical Analysis – Tariffs are back on the menu
• Can gold extend its winning streak to seven weeks?
• ECB’s de Guindos: It is very important to avoid a trade war
• Eurozone February Sentix investor confidence -12.7 vs -16.3 expected
• SNB total sight deposits w.e. 7 February CHF 438.1 bn vs CHF 441.9 bn prior
• EU is ready to push the trigger in response to Trump, says French foreign minister
• EU’s von der Leyen to meet with US VP Vance on Tuesday
• China says will place greater emphasis on boosting consumption

Markets:

• USD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields up 1 bps to 4.496%
• Gold up 1.5% to $2,904.46
• WTI crude up 1.3% to $71.92
• Bitcoin up 1.1% to $97,592

The start to the new week is featuring more of the same theme from last week. Trump is out threatening with tariffs again, this time stating he will impose 25% tariffs on steel and aluminum imports to the US as well as reciprocal tariffs against other nations later in the week.

The metal tariffs are no doubt going to come into play but markets are less frightened by all of this, especially on reciprocal tariffs – at least for now. We already got a taste of Trump’s ploy last week and the reception this time around is much calmer.

The dollar opened with a gap higher but largely surrendered those gains, albeit keeping marginally higher on the day.

EUR/USD was holding around 1.0290 levels before moving up to 1.0330 during the session and then back down now to 1.0315. Similarly, GBP/USD was around 1.2380 before pushing up to 1.2410 and then now returning back to 1.2385, down slightly on the day.

USD/JPY was an exception to all this, with the pair nudging higher back above 152.00 and keeping thereabouts. That said, it is still trailing just under its key daily moving averages as pointed out here. It’s a bit of a familiar feeling as we also saw similar moves last week.

In other markets, equities remain unfazed by Trump’s latest antics. US futures opened lower initially but are now at the highs for the day with S&P 500 futures up 0.4%. European indices are also pushing up, in search of a sixth straight week of gains.

Meanwhile, gold is also continuing to run hot as it pushes above $2,900 on the day. A seventh straight week of gains beckons for gold as the precious metal continues to thrive in this messy environment.

As we look to US trading later, Trump headlines will continue to be the thing to watch before the focus shifts towards US data later in the week.

This article was written by Justin Low at www.forexlive.com.