11/02/2025 - 07:55 UTCThe US dollar showed little movement against most major currencies on Monday, with the dollar index (USDX) ending the session almost unchanged with markets still on edge over prospects that the U.S. government could announce additional tariffs this week.
The US is set to impose a 25% tariff on all steel and aluminum imports, adding to existing duties. This decision, impacting major exporters like Canada, Brazil, and Mexico, follows recent tariffs on China. Despite this, there's hope for relief for Mexico and Canada due to their significance in the US supply chain. The earlier imposition of a 10% tariff on Chinese imports by the US has led to retaliatory measures from China, including tariffs on US oil, liquefied natural gas, and coal, which came into play earlier Monday.
This week's main economic focus is on US inflation data for January, due Wednesday. Predictions suggest a slowdown in consumer price growth compared to December. This could influence the Federal Reserve's interest rate decisions, especially with potential inflationary effects from new tariffs. Fed Chair Jerome Powell will also testify before Congress this week, his first appearance since July.
In corporate news, McDonald's stock rose over 3% after exceeding Q4 sales estimates, driven by strong performance in international markets, particularly the Middle East and Japan. US Steel corporations also surged following the announcement of new steel and aluminum tariffs. BP's stock climbed, fueled by reports of Elliott Investment Management acquiring a stake and pushing for changes to increase shareholder value. Lyft's shares jumped on news of planned autonomous robotaxi launches in 2026.
Oil prices rebounded on Monday after a three-week decline, following the latest tariffs announcements. These gains are mainly attributed to market uncertainty and potential supply constraints.
The focus for Tuesday turns to a testimony by Fed Chairman Powell about Semi-Annual Monetary Policy Report before the Senate Banking Committee, in Washington DC. In the week ahead, some price action could be seen upon U.S. Core CPI data due on Wednesday, PPI data due on Thursday, and Retail Sales due on Friday.
The EUR/USD pair declined on Monday, retreating into the 1.0300 range as market sentiment weakened. Investors remain cautious, awaiting clearer guidance from central bank policymakers, while new executive orders from U.S. President Donald Trump on tariffs add further uncertainty to the economic outlook.
This week, European economic data remains sparse, and a speech from European Central Bank (ECB) President Christine Lagarde failed to generate significant market movement—continuing a trend of measured statements from ECB officials. Meanwhile, Federal Reserve (Fed) Chair Jerome Powell is set to testify before the U.S. Senate Banking Committee, where he is expected to address questions on how the Fed plans to navigate the shifting landscape of Trump’s tariff policies.
Gold prices soared to a new all-time high above $2,900 on Monday, driven by heightened investor demand for safe-haven assets after U.S. President Donald Trump imposed 25% tariffs on base metals. Concerns that Trump’s trade policies could disrupt the global economy and fuel inflation prompted a surge in demand for the non-yielding metal.
However, Federal Reserve (Fed) officials have adopted a more cautious tone, preventing Gold from accelerating further. Traders will closely analyze Fed Chair Jerome Powell’s congressional testimony for any hawkish signals that could weigh on the yellow metal.
Oil prices climbed nearly 2% on Monday, recovering from three consecutive weeks of declines, even as investors remained wary of potential trade tensions triggered by U.S. President Donald Trump.
Trump was expected to sign an executive order on tariffs later Monday or Tuesday, a move that could escalate trade tensions. The potential for a trade war has raised concerns about its impact on global economic growth and energy demand.
Geopolitical developments also remain in focus. Trump stated on Sunday that the U.S. is making progress in talks with Russia to end the Ukraine war, though Russian officials emphasized that all of President Vladimir Putin’s conditions must be met before any resolution.
The US 500 closed higher on Monday, with gains in technology stocks, led by Nvidia, offsetting concerns over fresh tariff announcements from U.S. President Donald Trump. Investors are now turning their attention to key economic data and Federal Reserve Chair Jerome Powell’s testimony later this week.
Nvidia surged almost 3%, leading the broader tech sector higher after Evercore ISI upgraded the stock, calling the recent pullback a buying opportunity.
Federal Reserve Chair Jerome Powell will deliver his semiannual monetary policy testimony to Congress this week, appearing before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.
The economic spotlight this week will be on Wednesday’s CPI report, which is expected to show that headline inflation cooled month-over-month but remained steady year-over-year.
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