Asset Summary – Tuesday, 24 February
US DOLLAR is experiencing upward pressure as it trades near 97.85, influenced by a mix of trade-related uncertainties and central bank commentary. While a recent Supreme Court ruling against the President’s tariffs initially created some headwinds, the Dollar is finding support as investors weigh the implications of potential additional levies on countries that fail to honor trade agreements. This comes as the US President warns of increased tariffs in response to any trade deal violations. Meanwhile, remarks from Federal Reserve officials, such as Governor Waller’s stance on holding interest rates steady, are also contributing to the Dollar’s stability. Furthermore, geopolitical factors such as renewed talks between the US and Iran remain in focus. The market is also attentive to claims regarding US involvement in recent rate checks intended to bolster the Japanese Yen, which could have implications for the broader currency landscape.
BRITISH POUND is facing downward pressure due to a combination of factors. New US tariffs, although lower than initially feared, create uncertainty for UK businesses. Domestically, the UK labor market is showing signs of softening, with rising unemployment and moderating wage growth. This reinforces expectations of a potential interest rate cut by the Bank of England, further weakening the pound. Meanwhile, the US dollar is gaining strength, adding to the downward pressure on the GBP/USD pair. Traders are awaiting further economic data releases from both the UK and the US to gain more clarity on future monetary policy decisions, which will likely influence the pound’s direction.
EURO is facing headwinds as renewed trade tensions stemming from newly implemented US tariffs and the threat of increased duties weigh on investor sentiment. The European Parliament’s decision to delay a vote on the EU-US trade deal introduces further uncertainty. Traders are closely monitoring upcoming inflation data from key Eurozone economies to assess the impact of the Euro’s strength on price pressures and to gauge the potential response from the European Central Bank. Meanwhile, the EUR/USD pair is struggling to break above the 1.1800 level, pressured by modest US Dollar strength and improved risk appetite, even as tariff anxieties persist. The market is also focused on upcoming speeches from Federal Reserve officials, which could influence the Dollar’s trajectory and further impact the Euro’s trading range.
JAPANESE YEN is facing downward pressure as reports suggest the Prime Minister voiced concerns about interest rate hikes to the Bank of Japan Governor, casting doubt on the central bank’s monetary policy tightening. The yen’s weakness is further compounded by softer-than-expected national CPI data, raising concerns about the sustainability of inflation and diminishing expectations for future rate hikes. Furthermore, uncertainty surrounding US trade policies, with potential for increased tariffs, adds to the headwinds for the yen, while possible US intervention to stabilize the currency remains a background factor to consider.
CANADIAN DOLLAR is facing downward pressure as renewed trade tensions stemming from potential US tariffs weigh on Canada’s export-driven economy. Simultaneously, cooling inflation data in Canada is fueling speculation that the Bank of Canada may ease its monetary policy stance, further diminishing the currency’s appeal. A strong US dollar, bolstered by hawkish signals from the Federal Reserve and robust US economic data, is adding to the headwinds. Even rising oil prices have failed to provide substantial support, as narrowing yield spreads and increased protectionist measures continue to overshadow any positive impact from favorable court rulings. Traders are closely watching upcoming Canadian GDP data for further clues about the currency’s trajectory.
AUSTRALIAN DOLLAR is positioned near three-year highs as markets anticipate upcoming Australian inflation data that could solidify expectations for further interest rate hikes by the Reserve Bank of Australia. Strong inflation figures would likely increase the probability of another rate increase in May, potentially boosting the Aussie. However, uncertainty surrounding potential US tariffs creates a countervailing force, weighing on the currency due to its sensitivity to global trade dynamics. The interplay between domestic monetary policy expectations and international trade tensions will likely dictate whether the AUD can sustain its recent gains or faces a correction.
DOW JONES is likely to experience mixed influences in the near term. While futures contracts indicate a slight upward trend at the start of the trading day, suggesting some recovery from previous losses, the market remains sensitive to concerns about the impact of AI. The potential displacement of software services and disruptions to traditional financial infrastructure may weigh on certain sectors within the Dow. Additionally, proposed tariff increases could introduce further uncertainty. The performance of Nvidia and other chip producers, a significant component of the index, will be closely watched this week due to their earnings report, and any negative movement could offset positive momentum.
FTSE 100 experienced downward pressure as newly implemented global tariffs heightened trade uncertainty and sparked concerns about global economic expansion. Financial institutions and healthcare companies significantly contributed to the index’s decline, with banking stocks particularly affected by fears that tariffs could dampen economic activity. However, gains in commodity-related stocks, driven by rising crude oil prices and firmer metals prices, partially mitigated these losses. Positive company-specific news, such as revised guidance from Convatec and earnings from Croda, also provided some support to the index.
DAX faces downward pressure as tariff concerns and apprehension surrounding artificial intelligence weigh on investor confidence. Fresenius Medical Care’s disappointing revenue and operating profit forecast for 2026, despite cost-cutting efforts, triggered a significant sell-off. Similarly, while MTU Aero Engines reported strong Q4 profitability, its 2026 outlook aligning with expectations wasn’t enough to buoy the index. Losses in tech and banking sectors, exemplified by SAP, Deutsche Bank, and Siemens, further contributed to the DAX’s decline, suggesting a broad-based negative sentiment affecting the market.
NIKKEI experienced an upswing, closing higher following a holiday break, as domestic markets brushed aside negative cues from Wall Street related to AI anxieties, tariff concerns and geopolitical tensions. The Supreme Court’s decision on US tariffs injected volatility into the market, prompting Japan to seek reassurance for its companies. The rebound was largely driven by technology and AI-related stocks, demonstrating investor confidence in these sectors, while defense stocks faced headwinds due to China’s export restrictions. The overall sentiment suggests a degree of resilience in the face of global economic uncertainties, with specific sectors exhibiting divergent performance based on external factors.
GOLD is facing downward pressure as renewed trade uncertainty and geopolitical risks prompt investors to take profits after a period of gains. The strengthening US Dollar, fueled by returning liquidity after Chinese and Japanese markets re-opened, is also contributing to the decline. President Trump’s new global tariffs and the potential for further increases are unsettling markets and impacting investor confidence. While geopolitical tensions, particularly regarding US-Iran nuclear talks, and expectations of Federal Reserve interest rate cuts provide some support, gold’s price remains sensitive to developments in trade policy and overall market sentiment. Continued strong investment demand from India may cushion potential losses.
OIL is experiencing upward pressure, currently trading near a six-month high, fueled by geopolitical tensions in the Middle East. The possibility of renewed US-Iran negotiations and potential military conflict are key drivers, as uncertainty around Iranian oil supply impacts the market. Supply disruptions, alongside these geopolitical factors, are counteracting forecasts of a significant oil surplus. However, newly implemented global tariffs introduce a layer of risk, potentially weighing on demand and creating headwinds for further price increases.