Market participants are once again focusing on trade negotiations between the United States and several key partners, including the European Union. With no signs of an impending agreement, the risk of a trade war is escalating, causing pressure on the US dollar at the start of the week.<\/p>\n
Despite being considered a safe haven<\/em>, the resurgence of a trade war could negatively impact the US economy, fostering a bearish sentiment towards the dollar.<\/p>\n The European Union has announced plans to escalate import tariffs on goods from the United States if a trade agreement is not reached by August 1. Reports indicate that these tariffs will cover products totaling \u20ac21 billion, effective from August 6. Furthermore, a second round will impose tariffs on products valued at \u20ac72 billion.<\/p>\n In addition, the mood<\/em> among European nations is shifting; previously supportive of trade discussions, many countries are now backing measures for implementing countermeasures. This denotes a strong trading tool that would grant the European Commission broad authority to retaliate against the United States.<\/p>\n Such sentiment is likely to influence market movements during the European trading session on Tuesday (July 22, 2025).<\/p>\n GOLD<\/strong> The United States has not only failed to reach an agreement with the European Union but is also in a similar situation with Mexico, Canada, Japan, and South Korea, its main trade partners.<\/p>\n These countries face high import tariffs scheduled to commence on August 1. Should no agreement be reached by the end of this month, the potential for a trade war looms larger.<\/p>\n This sentiment will likely continue to impact gold prices during the European trading session.<\/p>\n OIL<\/strong> These two factors are expected to exert continued pressure on oil prices during the European trading session.<\/p>\n EURUSD<\/strong> Moreover, the European Central Bank (ECB) is not expected to lower interest rates further this year, enhancing the positive sentiment surrounding EURUSD.<\/p>\n GBPUSD<\/strong> The successful rise of GBPUSD earlier this week indicates substantial pressure on the dollar due to the increased risk of a trade war. This will likely sustain GBPUSD’s upward movement during the European session.<\/p>\n USDJPY<\/strong> However, ongoing political instability makes the yen vulnerable. By midday, USDJPY reversed course, rising to 147.808. This suggests that USDJPY will likely experience significant volatility in today’s European trading session, with a tendency to rebound<\/em>.<\/p>\n Nasdaq<\/strong> Market participants are also awaiting earnings reports from companies this week, including Alphabet, the parent company of Google. Given these factors, the potential for continued profit taking<\/em> is expected during the European trading session.<\/p>\n Market participants are once again focusing on trade negotiations between the United States and several key partners, including the European Union. With no signs of an impending agreement, the risk of a trade war is escalating, causing pressure on the US dollar at the start of the week. Despite being considered a safe haven, the […]<\/p>\n","protected":false},"author":4,"featured_media":21040,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5170,142],"tags":[5175,5174,5176,5178,5177,5168],"class_list":["post-78040","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-summary","category-news","tag-cls10","tag-eurusd","tag-gbpusd","tag-nq","tag-usdjpy","tag-xauusd"],"yoast_head":"\n
Gold prices (XAUUSD) surged by approximately $47 or 470 pips, reaching $3,400 per troy ounce at the beginning of last week. The risk of a renewed trade war has increased demand for gold as a safe haven<\/em> asset.<\/p>\n
Oil prices (CLS10) dropped to $65.76 per barrel at the beginning of last week, as markets assessed that the sanctions imposed by the European Union on Russia have had minimal effect on reducing global oil supply. Additionally, the threat of a trade war could stifle global economic growth, thereby diminishing oil demand.<\/p>\n
Despite the risks associated with a trade war between the US and the European Union, EURUSD rose by 670 points (67 pips) to 1.16936 in trading last Monday. As previously mentioned, an escalation in trade tensions could adversely affect the US economy, putting downward pressure on the dollar.<\/p>\n
GBPUSD climbed by 772 points (77.2 pips) to 1.34859 at the start of last week. Nonetheless, GBPUSD is overshadowed by negative sentiments due to the deteriorating UK economy in the second quarter, coupled with speculation that the Bank of England (BoE) may soon cut interest rates.<\/p>\n
USDJPY plummeted by 1.561 points (156.1 pips) to 147.264 during trading on Monday, following highly volatile movements. Japanese Prime Minister Shigeru Ishiba’s affirmation of continuing governance, despite his coalition party losing the majority in parliament, has provided a positive sentiment toward the yen.<\/p>\n
The Nasdaq index reached an all-time high of 23,423 at the beginning of last week but later retreated to 23,297. This decline is likely a result of profit taking<\/em> actions.<\/p>\n