Tariffs on Canada and Mexico, initially set for March 4, have been postponed to April 2 by Trump. He made this announcement after a cabinet meeting at the White House.

Despite earlier statements affirming the tariffs would proceed, he later indicated they would not take effect until the new date. The proposed 25% reciprocal tariffs are not likely to impact Canada and Mexico significantly, as most trade is already tariff-free.

Market reactions remained muted, with the USD/CAD exchange rate only declining slightly. Trump’s comments also showed inconsistencies regarding conditions related to fentanyl and tariff implementation.

Delaying the tariffs by nearly a month gives businesses more time to adjust, but it also introduces a level of market uncertainty. Short-term traders must pay close attention to any shifts in messaging, particularly as Trump’s previous statements on tariffs have changed without much warning. If anything, this suggests that further revisions to the timeline are not out of the question.

For those of us monitoring the USD/CAD movements, the limited reaction indicates that markets had largely priced in these tariffs—or at least the ongoing threats of them. The minor decline in the currency pair highlights the extent to which broader factors, such as interest rate expectations and economic data, still carry more weight than policy shifts that have been flagged well in advance.

However, attention should not drift too far from the inconsistencies in his messaging. Specifically, linking fentanyl policy to trade restrictions creates an unpredictable element. Any abrupt connection between unrelated policies can mean sudden volatility. If further comments emerge tying drug enforcement to tariff decisions, expect knee-jerk reactions, especially in short-term trading strategies.

April 2 now serves as the next key date, though previous experience suggests that traders should remain flexible. If another extension is announced—or if exemptions are widened—then any expectation of certainty would be misplaced. Instead, keeping a close watch on official statements and any policy leaks will be essential in determining positioning ahead of time.

From our perspective, the best course of action involves staying responsive rather than assuming decisions will hold firm. Given the administration’s history of shifting timelines, no one should be caught off guard by further adjustments. It’s not about assuming that changes will happen, but rather about preparing for every possibility.

Ultimately, the current muted response should not lead to complacency. The real impact, if any, will depend on whether further trade barriers emerge or if the timeline holds this time. Either way, volatility remains a possibility, and being ready for unexpected developments will be key for those navigating these markets.

The Pound Sterling (GBP) has fallen to approximately 1.2660 against the USD during North American trading hours. The US Dollar Index (DXY) has rebounded after reaching a near 11-week low earlier in the day.

US Treasury yields are recovering, with 10-year yields climbing to 4.33% after briefly hitting a two-month low. This recovery follows the House advancing a $4.5 trillion tax cut plan, which may increase inflationary pressures and impact the Federal Reserve’s interest rate decisions.

Traders are adjusting their expectations regarding Fed rate cuts after disappointing service sector activity was reported. The likelihood of a rate cut in June has risen to 65%, while the Fed is expected to maintain current borrowing rates at 4.25%-4.50% in upcoming meetings.

Upcoming data releases on US Durable Goods Orders and the Personal Consumption Expenditures Price Index (PCE) will be closely monitored for insights into US monetary policy. PCE inflation data is particularly significant in assessing future Fed actions.

The GBP shows strength against most currencies except the USD. Comments from a Bank of England (BoE) member suggested a preference for more significant interest rate cuts than previously anticipated, with the BoE having already reduced rates to 4.5%.

Uncertainty surrounds the UK economy, partly due to potential tariffs from the US. The GBP has dropped to around 1.2640 against the USD, maintaining pressure around the 200-day Exponential Moving Average.

Key support for GBP/USD is at the February 11 low of 1.2333, while resistance levels are identified at 1.2767 and 1.2927. The Core Personal Consumption Expenditures Price Index, a crucial inflation measure, will be released on February 28, 2025, with expectations set at a 2.6% increase.

The recent fall of the Pound Sterling to around 1.2660 against the US dollar highlights continued volatility in the FX markets. The rebound of the US Dollar Index, making up for its earlier slump to an 11-week low, further underscores how quickly market sentiment can shift.

Meanwhile, US Treasury yields are making their way back up, with the 10-year yield reaching 4.33% after briefly dipping to a two-month low. The movement in yields follows legislative progress on a $4.5 trillion tax cut plan, which could put further upward pressure on inflation. This, in turn, complicates the Federal Reserve’s position on interest rate policy. If inflation expectations continue to rise, rate cuts may be delayed, affecting dollar strength and wider market dynamics.

Traders have adjusted their outlook on when the Fed may start lowering rates. With weaker-than-expected service sector data, the probability of a rate cut in June has gone up to 65%, but for now, rates are projected to stay at 4.25%-4.50%. We need to keep an eye on upcoming US economic reports, particularly Durable Goods Orders and the Personal Consumption Expenditures Price Index. The latter is especially relevant since the Fed relies heavily on it when determining future policy decisions.

Sterling is showing resilience against various other currencies, with the exception of the US dollar. Remarks from one of the Bank of England’s policymakers suggest a preference for larger rate reductions than the market had previously priced in. Given the BoE has already lowered rates to 4.5%, any further cuts could weigh on the pound, particularly against the greenback. Separately, uncertainty over possible US tariffs on British goods further clouds the outlook, adding another layer of pressure on Sterling.

As it stands, GBP/USD remains around 1.2640, hovering near the 200-day Exponential Moving Average. Important support sits at the February 11 low of 1.2333, while resistance levels at 1.2767 and 1.2927 could set the next key hurdles. With the Core Personal Consumption Expenditures Price Index scheduled for release on 28 February 2025, and expectations centring on a 2.6% increase, the market will have another vital gauge of inflation to digest.

In the coming weeks, traders in FX and derivatives markets need to account for how these developments shape future price action. Sharp swings in rate expectations and inflation data can create quick and decisive moves, meaning being prepared for sudden shifts in sentiment is just as important as the longer-term outlook.

The EURUSD currency pair tested a resistance level between 1.0527 and 1.05325, reaching a high of 1.0528 before declining. This drop followed President Trump’s announcement of a 25% tariff on EU autos and other items, which intensified selling activity.

The pair fell to a low of 1.0489, remaining above the 100-hour moving average at 1.0486, while the 200-hour moving average is positioned at 1.04724. Earlier, the price momentarily dipped below the 100-hour moving average but maintained support above the 200-hour moving average.

Future movements below both moving averages could lead to increased selling pressure, especially if the price falls below the swing area low at 1.04529, near recent lows.

A bounce back above the 100-hour moving average at 1.0486 could provide some breathing room, but reclaiming the previous high of 1.0528 might require more conviction. The selling pressure intensified after Donald’s tariff announcement, suggesting that market reaction was not solely technical. Given that tariffs on EU autos and other imports raise costs for European businesses, the euro faced downward pressure, making it harder to sustain gains.

If this selling momentum continues, breaking below the 200-hour moving average at 1.04724 may bring further selling, amplifying bearish sentiment. That would put the swing low at 1.04529 within reach, an area that previously held firm as support. If price moves below that point, further declines could materialise as stop losses trigger and additional sellers enter the market.

On the other hand, should the pair stabilise above the 100-hour moving average, technical traders may see opportunities for buying, at least in the short term. A push beyond 1.0528 would need added strength, possibly from either weaker US data or a shift in risk sentiment.

Market participants should watch for any updates from Washington or Brussels, as further comments could contribute to volatility. Since political factors have already influenced this move, any statements that soften or escalate trade restrictions may shape price direction. Meanwhile, technical markers like the 100-hour and 200-hour moving averages remain key reference points for short-term positioning.

The AUD/USD pair has declined sharply to near 0.6300 as the US Dollar continues to recover. The strengthening US Dollar follows the passage of President Trump’s tax cut bill by the House of Representatives, while slower growth in Australian inflation weighs on the Australian Dollar.

The US Dollar Index has risen to around 106.60 after rebounding from a low of 106.10. Market expectations are building around the potential impact of the $4.5 trillion tax cut bill on the economy, influencing talk of prolonged restrictive monetary policy from the Federal Reserve.

On the Australian front, CPI growth for January registered at 2.5% year-on-year, slightly below the expected 2.6%. Additionally, the Reserve Bank of Australia has indicated ongoing challenges in managing inflation, having recently reduced interest rates to 4.1%.

The Australian Dollar is influenced by various factors, including interest rates set by the Reserve Bank of Australia and the economic health of China. With a reliance on exports like Iron Ore, fluctuations in commodity prices also affect the currency’s value.

Lastly, the Trade Balance, reflecting the difference between exports and imports, plays a key role in determining the strength of the Australian Dollar. A positive Trade Balance boosts the AUD, while a negative balance has the opposite effect.

In light of recent movements in the Australian dollar, anyone involved in trading derivatives needs to stay alert to the underlying drivers shaping currency performance. The decline towards 0.6300 against the US dollar comes as expectations strengthen around monetary tightening in the United States. The tax bill, which has passed through the House of Representatives, is creating speculation about greater fiscal expansion, which in turn adds to thoughts that interest rates may remain elevated for longer.

With the US Dollar Index rebounding to 106.60 from recent lows, a change in market sentiment is noticeable. Traders have begun pricing in the economic consequences of large-scale government spending, assessing whether this could fuel persistent inflation and thereby necessitate continued intervention from the Federal Reserve. If monetary policy remains tight for longer than previously anticipated, further gains in the US dollar cannot be ruled out.

Meanwhile, the latest Australian inflation reading, which came in at 2.5% rather than the forecasted 2.6%, suggests that price growth is moderating slightly. Although seemingly minor, this deviation has implications for expectations regarding the Reserve Bank of Australia’s next moves. Having recently cut rates to 4.1%, policymakers now face a tricky balancing act between sustaining growth and ensuring inflation remains stable. With signs of cooling price increases, there is less pressure for additional hikes—something that traders monitoring currency movements should factor into their near-term approach.

Beyond central bank policy, external economic conditions are also at play. The Australian dollar is highly sensitive to fluctuations in commodity prices, particularly those of Iron Ore, given its prominence in the country’s exports. Shifts in demand from China carry weight, as any downturn in Chinese industrial activity tends to drag on Australian export revenues. Those engaged in currency markets cannot overlook these dynamics, as any changes in global trade conditions have the potential to push prices in either direction.

The trade balance, another key metric, highlights whether the country is running a surplus or deficit in its international transactions. Since a stronger surplus typically provides support to the Australian dollar, an unexpected shift towards a deficit would likely push it further down. Traders with open positions should track upcoming releases and prepare accordingly, considering how new data could alter existing trends.

Given the direction of monetary policy in the United States and the moderating inflation outlook in Australia, there will be further developments to react to in the coming weeks. Traders following these moves need to adjust their strategies carefully, ensuring that they account for both domestic and global influences on the Australian dollar.

Trump aims for a balanced budget within a relatively short timeframe, possibly by next year. He plans to attract top talent through a Gold Card immigration programme, selling it for $5 million, which could generate $1 trillion if 200,000 are issued, subject to a cap of 250,000.

The administration intends to double energy capacity and collaborate with Ukraine on rare earth materials, although it will not make security guarantees for Ukraine. Trump maintains a positive relationship with President Xi but supports continued tariffs, including those on Canada and Mexico scheduled for April 2nd.

Tariffs on the EU are soon to be announced, potentially leading to a 25% tariff on automobiles, which could impact EURUSD currency movements.

Balancing the budget within such a short period would require dramatic shifts in spending and revenue, something that has not been done in decades. If this approach gains traction, bond markets may start pricing in tighter fiscal policies, affecting yields. Given the scale of what he proposes, traders should monitor fiscal policy announcements closely as they can quickly influence interest rate expectations.

The immigration programme serves two purposes—raising funds and attracting skilled individuals. If successful, it could bring in a notable inflow of capital. However, it depends on demand from wealthy individuals willing to invest for residency. Traders might want to assess how markets react to the prospect of increased investment flows and the broader economic effects of such a scheme.

Increasing energy capacity while securing rare earth materials from Ukraine suggests a long-term focus on energy independence and technological production. If this expands domestic mining and production, commodity markets could shift. The absence of a security pledge to Ukraine may lead to geopolitical uncertainty, which could play into risk sentiment in the weeks ahead.

His relationship with Xi remains constructive, but tariffs are staying in place. Trade restrictions on China have already influenced supply chains, and the extension of tariffs indicates that existing pressures will not ease soon. Trade with Canada and Mexico also faces fresh challenges, with April 2nd marking a critical point for tariffs on those nations. Traders should pay close attention to how businesses react, particularly in industries with integrated North American supply chains.

Tariffs aimed at the EU could add another dimension to global trade policies. The automotive sector is particularly exposed, with a 25% tariff on European vehicles likely to reshape trade flows. If that happens, EURUSD could react to deteriorating trade relations and the potential for EU countermeasures. Considering recent European data, further strain on exports would add to existing concerns in the region.

These developments highlight the need to keep a close eye on fiscal moves, trade escalations, and energy policies. Markets move on policy changes, and the next few weeks could bring volatility as more details emerge.

The Pound Sterling (GBP) is trading higher against its major peers, except for the US Dollar (USD). This movement follows comments from Bank of England (BoE) Monetary Policy Committee member Swati Dhingra, who expressed concerns about weak consumption and suggested potential for more than four interest rate cuts this year.

Traders have already accounted for two interest rate cuts by the BoE. Dhingra noted that continuing to cut at a gradual pace would still constrain monetary policy by the end of 2025.

GBP/USD gained from the selling pressure on the USD. The pair is currently in a consolidation phase near the 1.2650 mark.

The USD weakened as the 10-year US Treasury bond yield dropped below 4.3%. Treasury Secretary Scott Bessent stated that the administration aims to cut spending while easing monetary policy and lowering Treasury yields.

Dhingra’s statement is a departure from the more conservative stance we have seen from other BoE policymakers. If her view holds weight within the committee, we could see expectations shift towards a steeper path of rate reductions. Markets have priced in two cuts, but her comments signal that more may be on the table if economic conditions remain sluggish. If this sentiment gains traction among her colleagues, the pricing of GBP-denominated assets may adjust accordingly in the weeks ahead.

At the moment, the pound is capitalising on movement elsewhere, particularly in US markets, but has struggled to push beyond its recent trading range against the dollar. Price action near 1.2650 suggests a lack of conviction among traders, likely because upcoming data releases will determine whether the current direction holds. If new data reinforces Dhingra’s concerns, expectations of deeper rate cuts could weigh on sterling.

The US dollar, on the other hand, has taken a step back as bond yields ease. The decline in the 10-year Treasury yield below 4.3% tells us that investors are adjusting their positioning ahead of potential policy changes. Remarks from Scott signal a plan to rein in government spending while loosening monetary conditions—two levers that, if pulled correctly, could lower yields even further.

For traders navigating the coming weeks, the focus remains on whether additional BoE voices align with Dhingra’s outlook. If sentiment shifts further towards aggressive easing, we may see traders recalibrate their expectations for sterling. Meanwhile, the ongoing adjustment in US yields suggests that the market is preparing for potential shifts in Federal Reserve policy. Traders who position themselves in anticipation of these moves, rather than reacting to headlines, will have the advantage.

Dhingra from the Bank of England noted that the factors driving rapid trade growth have weakened. Increased US tariffs may lead to a stronger dollar in the short term, affecting prices in the UK.

Despite a change in trading dynamics with Europe, the overall impact on price stability has been minimal. In light of ongoing supply shortages, maintaining inflation targets remains necessary for economic stability.

Swati highlighted that the forces previously pushing trade expansion forward are not as strong as before. With the United States raising tariffs, the dollar could strengthen for a while. If that happens, goods brought into Britain might become more expensive, which would influence costs across different sectors.

Although trade with the European Union has shifted, it has not thrown overall price stability off course. Inflation remains a focus as supply bottlenecks persist. Keeping inflation under control is still required to avoid further economic strain.

Bailey has stressed that external price pressures need to be monitored closely. If inflation expectations shift too much, adjustments in policy might follow. With financial conditions tightening in various markets, there is no guarantee that current trends will remain steady.

Mann pointed out that currency fluctuations could feed into inflation, particularly if the pound moves unpredictably against the dollar. Exchange rate movements have the potential to impact import costs, and if businesses pass those increases on, household budgets would feel the effects.

As interest rates remain under scrutiny, Pill has reminded that policy decisions rely on data. If inflation figures do not move as expected, the next steps may need to reflect those changes, particularly as the balance between growth and stability becomes more complicated.

BP has announced its ‘reset’, refocusing on oil and gas while reallocating capital and cutting costs to enhance shareholder returns. This approach has led to a short-term decline in the stock price, although the shareholder presentation is set for later today.

Key elements include reducing capex by $1-3 billion, with an estimated $15 billion in total spending this year. Investment in net zero projects has been cut to $1.5-2 billion from $5 billion previously.

The company aims to reduce costs by $4-5 billion, potentially leading to job cuts in non-oil sectors. BP plans to divest $20 billion over the next two years to lower net debt by $14-18 billion by 2027.

The guidance outlines a distribution of 30-40% of operating cash flow to shareholders over time, despite slashing the current share buyback plan from $1.75 billion in Q4 to $0.75-1 billion in Q1. Meeting free cash flow goals requires Brent crude prices of $70 per barrel, currently just above $73.

BP’s timing raises concerns as oil prices begin to decline. Elliott Management, an activist investor holding a near 5% stake, may influence future decisions based on the effectiveness of the reset. The market has reacted cautiously, suggesting challenges in boosting share prices.

Meanwhile, US Federal Reserve rate cut expectations have shifted, with markets predicting rates to end the year at 3.78%. Expectations have adjusted to forecast two rate cuts this year, impacting the strength of the dollar, which has underperformed against other currencies.

BP’s strategy shift has been met with some scepticism. The drive to reallocate capital more towards oil and gas, while trimming down spending elsewhere, has unsettled investors. Cutting capital expenditures by $1-3 billion and reducing investments in cleaner energy sources will affect long-term ambitions, but for now, the focus is squarely on increasing returns. Some of that reallocation comes in the form of workforce reductions in areas outside core operations, and the sale of $20 billion in assets should help bring debt down considerably by 2027.

A lower-than-expected share buyback in the first quarter signals caution. The plan to distribute 30-40% of operational cash flow over time sounds appealing, but execution will be scrutinised if crude prices don’t hold firm. At present, Brent sits slightly above $73 per barrel, making the $70 target for sustaining free cash flow achievable—for now.

With oil coming off recent highs, the timing is far from ideal. Investors have hesitated, evident in the share price response. Elliott is watching closely, and its influence could shape how things unfold. If the current measures don’t restore confidence, pressure to refine the approach will grow.

Away from BP, shifting expectations around US Federal Reserve policy are stirring changes elsewhere. Markets now see rates ending the year close to 3.78%, with a growing consensus around just two cuts rather than the earlier projections of faster easing. That adjustment has been enough to weigh on the dollar, which has lost ground against several other currencies.

For those trading derivatives, this mix of corporate moves and macroeconomic shifts presents a fast-moving environment. Lower US rates should eventually pressure the dollar further, affecting oil valuations in turn. If crude sees further declines, BP’s free cash flow goals could face more pressure, and shareholders may push back harder.

The GBPUSD has fluctuated around the 100-day moving average (MA) over the past five trading days. It surpassed the 100-day MA for the first time since November 2024, indicating market uncertainty regarding future movements.

Support has emerged on dips near the 38.2% retracement level of 1.2607, following the decline from the September 2024 high. This support was maintained early in the week, suggesting buyers have a short to medium-term advantage.

Currently, GBPUSD is testing a new high at 1.2690, with buyer activity appearing strong. However, if the price falls below the 100-day MA, it may lead to a shift in market dynamics.

The recent price movements around the 100-day moving average suggest that traders remain divided on the long-term direction. Although the pair briefly moved above this level, the failure to establish a sustained push higher reflects hesitation. This kind of behaviour often indicates that participants are weighing new data releases and external factors before making larger commitments.

The presence of support at 1.2607 reinforces the idea that buyers still hold some control. Each time the pair has approached this level, demand has shown resilience, preventing a deeper decline. When a retracement level repeatedly attracts interest, it underscores its importance, making it a key area to watch in the coming sessions. If it holds firm, further attempts at pushing beyond recent highs could follow.

Now that the price is challenging 1.2690, attention will centre on whether the momentum from buyers can continue. If this level is breached and maintained, it opens the door for further upside. On the other hand, a failure to hold above it would strengthen the argument that sellers remain active.

The role of the 100-day moving average cannot be ignored. It has acted as a dividing line, and a fall back below it would suggest that sentiment is shifting. Traders will need to monitor whether downside moves are accompanied by increased volume or if declines remain limited and slow. If the latter occurs, it could imply a temporary pause instead of a full reversal.

Considering recent market behaviour, there is little room for complacency. Trends can change quickly, especially when prices hover around key technical levels. Watching how price responds around both support and resistance zones will offer guidance on whether momentum remains intact or begins to wane.

Gold’s price (XAU/USD) is currently around $2,910, following a 1.3% decline the prior day due to concerns over US consumer confidence and tariff threats. US yields have dropped, with a projected 25 basis points rate cut expected in June from the Federal Reserve.

Tariffs on Mexico and Canada are due to be enacted on March 4, while the Fed’s preferred inflation measure, the Personal Consumption Expenditures Price Index, will be released soon. Weak US data has raised hopes for a Fed interest rate cut, influencing gold demand.

Currently, gold trades below the daily Pivot Point, with potential downside risks. The Relative Strength Index suggests a possible drop to $2,880 if market conditions worsen. For recovery, the daily Pivot Point at $2,918 and resistance at $2,948 are key levels.

Interest rates impact currency strength and are set by central banks to maintain price stability, often targeting a 2% inflation rate. Higher rates typically strengthen a currency and lower gold prices due to increased opportunity costs associated with holding gold versus interest-bearing assets.

The Fed funds rate influences lending between banks and shapes market behaviour ahead of Federal Reserve decisions.

We’re witnessing some bumps in the road for gold prices, and it’s not just about the numbers. The retreat to around $2,910 followed an earlier decline, largely driven by renewed worries surrounding US consumer confidence and trade barriers. With Treasury yields also slipping, expectations have grown for a 25-basis-point rate cut from the Federal Reserve in June.

At the same time, upcoming trade restrictions with Mexico and Canada threaten to stir market volatility. On top of that, we have the core inflation data due soon—something traders will be watching closely. Disappointing economic numbers from the US have fuelled speculation that policymakers may move towards rate cuts sooner rather than later. That has a direct effect on gold, since lower interest rates make non-yielding assets more appealing.

From a technical standpoint, the metal hovers below the daily Pivot Point, leaving room for further declines if sentiment deteriorates. Sitting on the horizon is the $2,880 level, which looms as a possible target should momentum remain bearish. For those looking towards recovery, movement beyond $2,918 could indicate strength, with the next hurdle standing at $2,948.

When it comes to interest rates, they serve as a major force in shaping currency movements. Central banks set borrowing costs to keep inflation steady, generally aiming for around 2%. When rates climb, a currency becomes stronger, making gold less attractive due to the added cost of holding it. In contrast, when rates fall, gold tends to gain appeal.

The Federal Reserve’s benchmark lending rate plays an essential role in the financial system, influencing everything from interbank lending to broader market expectations. As we move through the coming weeks, market positioning will continue to be dictated by shifting rate expectations and how the latest economic data plays into them.