Gold prices edge higher on raised Fed rate cut hopes
Investing.com -- The Euro (EUR) and British Pound (GBP) are struggling to maintain the gains they made last week, as the US Dollar (USD) is showing a minor upward trend.
In contrast, the Canadian Dollar (CAD) and Australian Dollar (AUD) are faring better than their European counterparts.
This performance may be due to traders’ reluctance to buy USD/CAD ahead of Canada’s Consumer Price Index (CPI) report for January, with the expectation that it may be high, following the high US CPI report released last Friday.
Hopes for a US-proposed peace deal between Ukraine and Russia were dashed over the weekend, leading to a colder relationship between the US and Europe. This development has implications for any agreement that could weaken the USD in exchange for tariffs, according to Macquarie.
Without US-European Union cooperation, the period of tariff uncertainty for the EUR may extend further. As a result, it’s premature to say that the EUR/USD is on an upward trend, with a higher likelihood of this happening in the second quarter of the year, the strategists said.
The mixed sentiment in the global markets, coupled with a better outlook for China, suggests that an extended USD rally is not imminent. If traders were hopeful for peace last week, which contributed to the rallies of the EUR and GBP, this relative optimism should be diminishing after the events of the past weekend.
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