The President of the United States, Donald Trump, has officially signed an executive order imposing a 25% tariff on imported steel and aluminum from all countries, effective March 4th.
This action by Trump is expected to impact market movements during the European trading session on Tuesday, February 11, 2025.
Recommended
Recommended
Recommended
Recommended
GOLD
The price of Gold (XAUUSD) surged over $47 or 470 pips at the beginning of last week, continuing to rise by more than $350 to reach a record high of $2,942 per troy ounce.
In addition to raising tariffs on steel and aluminum, Trump also announced plans to implement a reciprocal policy within two days. This reciprocal policy means that if other countries increase their import tariffs on American goods, Trump will respond by raising tariffs on products from those nations. Such a scenario poses a risk of an escalating trade war, boosting demand for Gold as a safe haven investment.
The trade war between the U.S. and China from 2018 to 2019 saw Gold prices skyrocket. Market participants are recalling this historical precedent, leading to a rush in Gold purchases.
OIL
The Oil price (CLS10) jumped by $1.41 to $72.46 per barrel at the start of last week. This increase occurred despite the negative sentiment surrounding the risk of a larger trade conflict.
The rise in Oil prices could be attributed to a short covering phenomenon, as prices had previously hit a five-week low. In other words, Oil remains vulnerable to potential downward pressures.
EURUSD
EURUSD dropped 213 points (21.3 pips) to 1.03053 during trading on Monday, following a volatile response to the latest U.S. import tariffs.
Germany has been notably impacted due to its status as a significant steel exporter to the U.S., adding to the negative sentiment surrounding the EURUSD. This sentiment may worsen if unemployment data for France, scheduled for release at 13:30 WIB, exceeds the forecast of 7.6% provided by Trading Central.
GBPUSD
Similar to the EURUSD, this currency pair also fell by 336 points (33.6 pips) to 1.23656 after experiencing volatility. The risk of a larger trade conflict continues to cast a shadow on GBPUSD, which will be felt throughout the European trading session.
USDJPY
The USDJPY pair rose by 590 points (59 pips) to 151.988 in Monday’s trading. The volatility of USDJPY remains high, as both the U.S. dollar and the Japanese yen are considered safe haven currencies.
However, given that U.S. interest rates are significantly higher than those in Japan, the U.S. dollar maintains an advantageous position. Hence, the sentiment for USDJPY remains largely optimistic.
Nasdaq
The Nasdaq index surged by 262 points to 21,836 during Monday’s trading. The delayed implementation of the tariffs on steel and aluminum could pave the way for trade negotiations to prevent a larger trade war.
This hope has contributed to the Nasdaq’s rise. Nevertheless, the looming uncertainty has the potential to keep the Nasdaq volatile, with a risk of future declines.
