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19/02/2025 - 08:50 UTCThe US dollar posted moderate gains against most major currencies on Tuesday, with the US dollar index (USDX) up by 0.3% as dollar traders assess key negotiations between U.S. and Russia on a deal to end the war in Ukraine and lingering tariff concerns.
In the latest tariff developments, U.S. President said on Tuesday that he plans to impose tariffs of around 25% on automobiles, semiconductors, and pharmaceutical imports, and will enact some of them by April. Specifically, he mentioned imposing 25% tariffs on pharmaceuticals and semiconductor imports, and that the duties will increase substantially over the next year. On the automobile duties, he stated that the 25% tariffs could be imposed by as soon as April 2.
Wall Street had a positive start to the week, with the US 500 reaching a new record high on Tuesday. The US tech 100 and the US 30 also saw slight gains as buyers entered the market late in the day. In corporate news, Intel's stock price surged by 16% following a Wall Street Journal report that Broadcom and TSMC are considering splitting the company in two. Broadcom is reportedly interested in Intel's chip design and marketing, while TSMC is exploring acquiring a controlling stake, or all of Intel's chip factories. Intel's stock has risen approximately 18% this year, capping its best week in 25 years. In other news, a Delta Air Lines plane flipped upon landing in Toronto, injuring 18 of the 80 passengers onboard.
On the energy front, the two main crude oil benchmarks WTI and Brent are moving higher this week following an attack on an oil pipeline pumping station in the Caspian Sea which slowed flows from Kazakhstan, while investors also look for clarity on the Ukraine peace talks.
For Wednesday, the focus turns to the release of the minutes from January's meeting, where rates were held steady. Some price action could also be observed upon the U.S. buildings permit announcement. Later this week, Flash Manufacturing and Services PMIs are due from the US, the UK and the eurozone along with quarterly earnings reports by Walmart and Alibaba due on Thursday.
The EUR/USD pair struggled to hold gains at the 1.0500 level on Monday, ending a four-day winning streak as bullish sentiment cooled.
Germany and the broader Eurozone will release economic sentiment survey results early Tuesday, but the impact on markets is likely to be muted. Consumer sentiment often lags behind broader economic trends, making these reports less influential on immediate price action. However, February’s figures are expected to show an improvement from January’s readings.
The key focus for US markets this week will be Wednesday’s release of the Federal Reserve’s Meeting Minutes from its latest rate decision. Additionally, US Purchasing Managers' Index (PMI) data is set for release on Friday, offering further insight into economic conditions later in the week.
Gold prices edged higher on Monday in subdued trading as US markets remained closed for Presidents’ Day.
Despite recording its steepest decline since December 18 last Friday, gold’s broader outlook remains positive, supported by ongoing geopolitical uncertainties and US trade policies aimed at reducing the deficit.
Last week’s US economic data painted a mixed picture. Both the Consumer Price Index (CPI) and Producer Price Index (PPI) came in slightly above expectations, while Retail Sales disappointed, prompting investors to anticipate further policy easing from the Federal Reserve (Fed).
Oil prices gained on Monday following an attack on a pipeline pumping station in the Caspian Sea, which disrupted flows from Kazakhstan. Meanwhile, investors closely monitored the potential for a Moscow-Kyiv ceasefire agreement, which could ease sanctions and increase global crude supply.
A weaker US dollar also contributed to oil’s upward momentum, as the dollar index hovered near a two-month low after softer-than-expected US retail sales data for January, making crude more affordable for non-US buyers.
Elsewhere, concerns over global trade tensions capped oil’s gains after Trump ordered a review of reciprocal tariffs against countries imposing duties on US goods.
U.S. stock index futures drifted higher in thin trading on Monday evening, as investors remained cautious about potential trade tariffs and the prospect of prolonged elevated interest rates.
With U.S. markets closed for a holiday, trading volumes were subdued, offering little fresh direction for Wall Street. Attention remained focused on former President Donald Trump’s plans for new trade tariffs, alongside concerns about the Federal Reserve’s policy stance following last week’s stubborn inflation readings.
On Monday, Trump reiterated his intention to implement reciprocal tariffs, stating that the U.S. would match duties imposed by other countries on American exports.
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