Despite mixed news on US trade talks and tensions with China, market sentiment improved early Thursday, boosted by progress in US-Japan trade talks. This came despite concerns raised by Fed Chair Powell about growth and inflation risks from Trump’s tariffs. Weaker US Retail Sales and Fitch’s global growth downgrade failed to shake market confidence.
The US Dollar Index (DXY) rebounded from losses, while EURUSD added to its weekly drop ahead of upcoming US data and the ECB rate decision. USDJPY rose from a 7-month low, and GBPUSD ended a seven-day winning streak. AUDUSD and NZDUSD paused their uptrends, while USDCAD reversed losses despite higher oil prices. Gold hit a new high near $3,358 before a slight pullback, and cryptocurrencies stayed within their weekly range.
Despite a weaker US Dollar, the EURUSD struggled due to stalled EU-US trade talks, disappointing EU data, and a dovish ECB outlook. Growing recession fears in Germany, France, and Italy also pressured the Euro. It should be observed that the pair didn’t react positively to weaker US Retail Sales, inflation data, or cautious remarks from Fed Chairman Powell. Moving on, the ECB is expected to cut rates by 0.25% today, but its statement and President Lagarde’s tone on economic concerns and further rate cuts could weigh on the EURUSD.
The US Dollar’s rebound early Thursday put pressure on GBP/USD after a seven-day rally, causing a pullback from a 6.5-month high. The pair also faces challenges from weak UK data and economic concerns tied to US tariffs, revealed in the BoE’s Quarterly Bulletin.
Meanwhile, USDJPY outperforms other G10 currency pairs, bouncing off a seven-month low on optimism from US-Japan trade talks. Despite Japan's strong export data and cautious comments from BoJ officials on rate hikes, the Yen weakened, helping the pair recover.
Like other major currencies, AUDUSD, NZDUSD, and USDCAD saw intraday losses against the US Dollar, though they remain stronger for the week versus the Greenback. Mixed news on China-US trade and ongoing tariff tensions weigh on these commodity-linked currencies, especially as the US Dollar rebounds before the Good Friday holiday. Meanwhile, Crude Oil rises on US-Iran tensions but doesn’t impact USDCAD much, as the BoC signaled readiness to cut rates if necessary, despite keeping policy unchanged and pushing the pair lower the day before.
Gold posts its first daily loss in three days, pulling back from the all-time high of $3,358 to around $3,317. This move reflects the US Dollar’s rebound and the market's consolidation ahead of the Friday holiday. However, rising market uncertainty and strong demand from China keep gold buyers optimistic.
Meanwhile, WTI Crude Oil ignores a higher-than-expected inventory build, focusing instead on supply concerns triggered by news of new US sanctions on Iranian oil tankers.
A slight boost in market sentiment helps Bitcoin (BTCUSD) and Ethereum (ETHUSD) post modest intraday gains, despite concerns over Trump’s tariffs weighing on crypto buyers. However, recent ETF outflows and low liquidity are keeping BTC and ETH trading within their weekly range, limiting further upside.
Looking ahead, the ECB’s rate decision, US housing data, and weekly employment figures will be key events before the Good Friday holiday. The ECB is expected to cut rates by 0.25% and highlight economic concerns from Trump’s tariffs, which could weigh on EUR/USD. Meanwhile, weaker US data and mixed trade news may challenge the US Dollar’s recent rebound. However, safe-haven assets like JPY, Gold, and CHF may stay strong amid broader economic uncertainty.
May the trading luck be with you!
