U.S. Trade Policy Back in the Spotlight
There are also indications that the administration may expand the use of Section 232—previously applied to steel and aluminum imports—to additional sectors under the national security framework. In practice, this would allow elevated trade barriers to remain in place despite earlier legal constraints.
At the same time, questions persist regarding potential refunds of previously collected duties. According to reports from Bloomberg, the process could be complicated by procedural hurdles, raising concerns about the credibility and predictability of economic policy in the United States. Nevertheless, investors continue to treat U.S. assets as relatively safe—demand for Treasuries remains strong, with 10-year yields declining to around 4.03%.
Currencies: Dollar Benefits, Yen Under Pressure
In currency markets, the U.S. dollar maintains its advantage, supported by global uncertainty and capital flows into perceived safe-haven assets. Among the weakest currencies is the Japanese yen, weighed down by expectations that any rate hikes by the Bank of Japan would be gradual and insufficient to offset expansionary fiscal policy in Japan.
Meanwhile, some commodity-linked currencies are staging modest rebounds. The Norwegian krone and the British pound also show relative strength, although it remains unclear whether this marks the beginning of a sustained trend or merely a technical correction.
Commodities and Geopolitics: Oil Elevated, Metals Stable
Commodity markets continue to reflect heightened volatility. Oil prices remain elevated amid tensions surrounding Iran and speculation about potential military escalation by the United States.
Precious metals, after a brief pullback, are stabilizing, with investor demand remaining strong in an environment of rising risk aversion. The return of market participants from China following Lunar New Year celebrations has not materially altered the broader trend.
EUR/USD Under Pressure from Trade Risks
The prospect of escalating trade tensions between the U.S. and the European Union continues to weigh on the euro. The decision by the European Parliament to suspend ratification of the EU–U.S. trade agreement increases the risk of retaliatory measures, including new tariffs on selected sectors.
Despite earlier signs of improving economic momentum in the euro area, growing political uncertainty may limit the currency’s upside potential. Technically, EUR/USD remains below the 1.18 level, signaling persistent downside pressure. A sustained break below recent lows would likely confirm a deeper weakening trend for the euro.
Key Macroeconomic Events
Investors are focusing on leading economic indicators released by the Conference Board, along with speeches from central bank officials that may provide guidance on the future direction of monetary policy across major economies.
