Dollar strengthened on tariff concerns

Trade and Tariffs

The Trump administration unveiled plans for aggressive trade measures, including up to 100% tariffs on foreign-made computer chips, targeting Taiwan's TSMC. Additional tariffs are aimed at pharmaceuticals and steel to bolster domestic manufacturing. Canadian imports may face a critical February 1 deadline for potential tariffs, signaling heightened trade tensions.

Currencies

The US dollar gained strength amid tariff-related concerns, impacting major currency pairs:

• EUR/USD dropped 0.54% to 1.0441.
• USD/JPY climbed 0.84% to 155.57.

Investors are focused on upcoming economic indicators, including US durable goods orders and consumer confidence data, alongside key central bank meetings. The Federal Reserve is set to conclude its policy meeting on Wednesday, while the ECB is anticipated to announce a rate cut later this week.

Commodities

• Gold (XAU/USD): Prices remained under pressure during early European trading as US Treasury yields rose modestly and the dollar rebounded from a monthly low. Inflation concerns stemming from US trade tariff threats supported the yield recovery, further weakening bullion demand.
• Silver: Continued trading with a bearish outlook, hovering near a two-week low.
• Crude Oil (WTI): WTI struggled near $73.00 as US trade policies introduced uncertainty. Over the weekend, President Trump briefly imposed tariffs on Colombia before reversing course following negotiations. With threats of action against China, Canada, and OPEC nations, oil prices remain vulnerable to policy-driven disruptions.

Key Economic Data to Watch

Markets await US durable goods orders and consumer confidence figures, which could shape near-term sentiment. Central bank decisions later this week are likely to drive significant market movements, with a particular focus on the Federal Reserve and European Central Bank strategies.