Optimism kicks off the key central bank week, fueled by China’s “special action plan,” progress in Ukraine-Russia ceasefire talks, Germany-led positivity, and easing hawkish Fed expectations amid softer US data. However, mixed China data, fresh US recession concerns, caution ahead of today’s US retail sales, and major central bank decisions this week are tempering the upbeat mood early Monday.
The US Dollar Index (DXY) posted a second consecutive weekly loss as mixed inflation concerns, weak business and consumer sentiment, and growth fears—reinforced by US Treasury Secretary Bessent’s comments—kept pressure on the Greenback.
A weaker US Dollar allowed major currencies, Antipodeans, and commodities to finish the week higher, though momentum faded later. Gold grabbed the spotlight, surging to a record high near $3,000. Further, EURUSD and GBPUSD hit multi-month highs, while USDJPY defied the trend, rebounding from a five-month low. That said, the Antipodeans held slight gains, crude oil erases the previous week’s recovery whereas cryptocurrencies remained under pressure. At last, despite logging a fourth consecutive weekly loss, major US equities managed to close on a positive note.
Optimism over Germany’s debt deal and a surprisingly bullish EUR net speculative position, per CFTC data, support EURUSD near its highest level since late 2024. However, upside momentum fades as traders await US Retail Sales and ECB policymakers highlight economic uncertainty. Even so, growing expectations of a Fed dovish pause continue to bolster the pair’s bullish bias.
GBPUSD remains under pressure near four-month high after declining in the last two consecutive days, as Friday’s weak UK industrial and manufacturing data, along with downbeat GDP figures, weigh on sentiment. A dovish Bank of England (BoE) outlook further pressures the Pound, despite last week’s overall gain.
Meanwhile, USDJPY holds firm after rebounding from its lowest level since October, supported by speculation of Japan’s intervention, cautious market optimism, and concerns over US tariffs on Japan.
The Australian, New Zealand, and Canadian Dollars trade mixed, struggling to sustain last week’s gains against the US Dollar. USDCAD faces the most pressure due to US-Canada trade tensions and weaker crude oil prices.
AUDUSD buyers hesitate after Australia’s Treasurer warned of inflation and job risks following a cyclone in Queensland and NSW. Meanwhile, NZDUSD edges higher despite a downward revision in growth forecasts by the New Zealand Institute of Economic Research (NZIER) survey of economists and a return to contraction in New Zealand’s February services PMI (49.1 vs. 50.4 prior).
However, doubts over the US Dollar’s rebound and China-linked optimism continue to support Antipodeans and commodities.
Gold remains steady near its all-time high as Friday’s "Gravestone Doji" candlestick at key trendline resistance signals caution ahead of a big week. However, US economic concerns and global trade and political uncertainty keep XAUUSD buyers optimistic.
Meanwhile, crude oil struggles despite breaking a seven-week losing streak, as Trump’s warning to Houthis and Iran following an attack on US vessel clashes with rising fears of market oversupply in 2025, limiting its corrective bounce.
Rising concerns over Trump’s trade war overshadow his crypto-friendly stance, pressuring Bitcoin (BTCUSD) and Ethereum (ETHUSD) despite the recent corrective bounce. Adding to the downside, the US SEC’s delay on multiple spot altcoin ETFs, fading institutional interest, and ongoing ETF outflows further challenge crypto buyers.
A high-stakes week awaits as major central banks—including the Fed, BoJ, BoE, and SNB—announce their monetary policy decisions, shaking up markets. Key economic releases, such as Monday’s US Retail Sales and Thursday’s UK employment data, along with geopolitical headlines on Ukraine, Iran, and Trump tariffs, will add to market volatility.
Despite expectations for the Fed to hold rates steady, a weak US Dollar is likely to persist due to recent soft data, potentially pushing gold to a fresh all-time high. Meanwhile, EURUSD may struggle if Germany fails to meet market optimism and ECB officials remain cautious.
Other major currencies and Antipodeans could see some shifts, but a significant downside move appears unlikely unless Fed Chair Powell delivers a surprise—an outcome that remains low on expectations.
May the trading luck be with you!
