U.S. Foreign & Trade Policy in Focus

U.S. Foreign & Trade Policy in Focus: Market Impact & Key Developments

This week, market attention remains on U.S. foreign and domestic policy, particularly the Russia-Ukraine peace talks and international trade relations. On Thursday, President Trump’s public address and meetings propelled the U.S. dollar higher after three consecutive weeks of losses.

Trade Policy Escalates to Global Concerns

On Thursday, Trump reaffirmed that tariffs on Mexican and Canadian imports will take effect on March 4th as originally planned. With just five days remaining until implementation, concerns over global trade tensions have reignited.

Earlier, Trump also announced plans to impose tariffs on the European Union (EU) and signed a memorandum introducing the “Fair and Reciprocal Plan.” This initiative aims to align U.S. tariffs with those imposed by other nations on American goods. The policy specifically targets key U.S. trade partners, including the EU, Japan, and India, seeking to address perceived trade imbalances.

Meanwhile, the UK appears to have “avoided” the tariff threat. Trump suggested that the UK might be exempt from these tariffs, praising Prime Minister Keir Starmer’s “strong lobbying” efforts during their meeting yesterday.

Dollar Surges as Major Currencies Sell-off

The U.S. dollar surged on Thursday as the euro and Canadian dollar weakened, while global trade concerns triggered a sell-off in risk-sensitive currencies like the Australian dollar.

 (US Dollar Index, 4H Chart Analysis; Source: Trading View)

The DXY found strong support near 106.15, forming a triple-bottom pattern earlier this week, which fuelled the dollar’s rally. Currently, the index is trading around 107.00. If this level holds, further upside momentum in the U.S. dollar remains possible, supported by prevailing market conditions.

Russian-Ukraine Peace Talks Positive

Trump also discussed on the ongoing situation in Ukraine on meeting with UK Prime Minister Starmer yesterday, and expressed confidence in Russian President Putin’s commitment to a peace deal.

Russia reiterated its key demands, including:

• Recognition of its annexation of certain Ukrainian territories.
• Ukraine’s commitment to not seeking NATO membership.
• Opposition to the deployment of NATO peacekeeping forces in Ukraine.

President Vladimir Putin acknowledged that European countries will eventually need to be involved in the peace process.

Markets are closely monitoring the upcoming high-level meeting, which is expected to include European leaders and potentially direct negotiations between U.S. President Donald Trump, Putin, and Ukrainian President Volodymyr Zelensky. These discussions could have a significant impact on geopolitical stability.

Gold Enters a Corrective Moves

Although no concrete peace deal has been reached yet, the positive developments in the Ukraine peace talks have weakened demand for safe-haven assets, leading to a pullback in gold from its record highs.

 (XAU/USD, 4-H Chart Analysis; Source: Trading View)

Gold has broken below the key 2880 support level, signaling a potential continuation of its corrective move toward the next major support at 2840.

Disclaimer  

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