The U.S. dollar stabilized Thursday as investor caution intensified following renewed tariff threats from President Trump against Europe and Canada, including a potential 25% tariff on European autos and alcohol. Trump's speculation about annexing Greenland and warnings of a U.S. government shutdown added further uncertainty. U.S. weekly jobless claims and PPI data showed economic stability, keeping Treasury yields modestly higher.

Euro Retreats on ECB Concerns, Stimulus Doubts

EUR/USD slipped 0.3%, pressured by fading enthusiasm over Germany's proposed stimulus and lingering tariff worries. ECB President Lagarde warned of persistent inflation risks from trade disruptions. EUR/USD neared support at its 200-day moving average (1.0721) as traders reduced bullish positions amid geopolitical uncertainties.

Sterling Weakens Ahead of UK GDP Data

GBP/USD edged slightly lower (-0.06%) amid subdued risk sentiment and skepticism about U.K. growth prospects. Rising euro-sterling flows capped pound gains, with key resistance around 1.30 limiting upside. Traders remain cautious ahead of Friday’s U.K. GDP release.

Yen Strengthens as Equities Fall

USD/JPY fell 0.33% amid heightened risk aversion, driven by a sharp decline in U.S. stocks, with the S&P 500 down nearly 1%. The yen benefited from safe-haven demand, though low volatility limited larger moves. Key support remains near March lows at 146.94.

Commodities Mixed; Gold Gains, Oil Drops

Gold rose 1%, benefiting from safe-haven demand. Oil prices slid 1.7%, pressured by growing supply concerns and weaker demand forecasts. Copper advanced modestly (+0.8%), supported by tightening supplies.

Market Outlook: Volatility Likely to Persist

Traders remain cautious amid ongoing geopolitical and tariff uncertainties, awaiting key economic data from the U.S. and U.K., likely ensuring continued market volatility into next week.