Markets swing on trade news: XAU, BTC amass USD outflows [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

Trade headlines are accelerating again. Markets ended last week on a sour note after President Donald Trump threatened to impose a 50% tariff on European imports by June 1st, prompting a sharp selloff in major US and European indices. He also warned that Apple could face a 25% tariff unless it relocates its production to the US. Yet, sentiment has shifted sharply this morning. The Nikkei 225 rose more than 1.7%, buoyed by hopes that the US and Japan are progressing toward a trade deal. European and US futures rebounded on news that the 50% EU tariff threat will be postponed to June 9th.

Selling pressure on the US dollar continues, driven by renewed trade frictions and swelling concerns over US debt. The dollar index is nearing its April lows, while the EURUSD has opened the week on strong footing—partly in relief over the delayed EU tariff deadline, though it's worth noting the euro was already rising on Friday when the tariff threat emerged. The euro appears to be acting as both a safe haven and a risk-on asset amid trade headlines. Cable surged past 1.35 for the first time in over three years, while the USDJPY looks poised to test the 142 level to the downside, gold continues to hold above $3,300 per ounce, supported by trade and debt uncertainties and Bitcoin is catching a bid amid capital outflows from the dollar and growing adoption by institutional players.

The week will bring fresh inflation reports from major Eurozone economies and Japan, a likely rate cut from the Reserve Bank of New Zealand (RBNZ), the US GDP and PCE updates and Nvidia earnings!

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.