Trump’s tariff delay weakens US dollar; Gold hits record highs amid market uncertainty

U.S. President Donald Trump's decision to delay a planned 50% tariff on European Union imports until July 9 has injected short-term relief into global markets but also contributed to a weakening U.S. dollar. The dollar is on track for its longest losing streak since 2017, reflecting persistent investor uncertainty amid unpredictable trade policies.

The tariff postponement followed a call between Trump and European Commission President Ursula von der Leyen, allowing more time for negotiations. While this move buoyed equity markets worldwide, including a 1% rise in the pan-European STOXX 600 and gains in Asian and Australian shares, it also underscored fragile investor confidence.

"The temporary trade reprieve did little to help the dollar, which remained stuck near its lowest in a month," analysts noted, with the dollar set for a fifth consecutive monthly decline.

As the dollar loses some of its safe-haven appeal, investors have turned to gold, traditionally a hedge against political and financial instability. This shift has driven gold prices to record highs this year.

David Meier, economist at Julius Baer, said, "A U.S. dollar regime change could be in the making in the long term after it appears to have peaked recently."

Despite the positive market reaction to the tariff delay, concerns remain about the broader U.S. fiscal trajectory and trade relations, with volatility expected to persist. Investors continue to monitor economic data and upcoming indicators closely, balancing optimism with caution amid ongoing geopolitical and economic uncertainties.

U.S. President Donald Trump's delay of a 50% tariff on EU imports until July 9 has weakened the U.S. dollar, which is set for its longest losing streak since 2017. Meanwhile, gold prices have surged to record highs amid ongoing market uncertainty and fragile investor sentiment.