US President Donald Trump's willingness to show "flexibility" on trade tariffs preceded the White House’s announcements of adjusting reciprocal tariff policies and triggered the market’s optimism early Monday. This, combined with news of global leaders pushing for a Ukraine-Russia ceasefire and easing US recession fears, boosted sentiment.
The risk-on mood interrupted the US Dollar Index's (DXY) three-day winning streak as investors focused on quarter-end consolidation and upcoming US economic data, including PMIs, Q4 GDP final readings, and Fed inflation updates.
Euro licks its wounds as the US Dollar’s retreat joins a jump in the major currency's net speculative positions. Meanwhile, GBPUSD also stalls a two-day losing streak while reversing from a fortnight low as traders await this week’s UK PMI, inflation, and spring budget. That said, USDJPY defies the trend, rising for a third straight day, while the Antipodean currencies are mixed.
Gold continues its three-day losing streak, while crude oil retreats. Cryptocurrencies and equities see slight gains as investors brace for a busy week of economic data.
EURUSD rebounds from a two-week low, marking its first daily gain in four, as the US Dollar retreats and fears of an EU-US trade conflict ease, supported by stronger Eurozone data and optimism around Germany.
GBPUSD breaks a two-day losing streak as traders await BoE Governor Andrew Bailey’s speech and the March UK PMIs. Stronger UK data also underpin the Pound trader’s optimism ahead of Wednesday’s British Spring Budget.
Despite the US Dollar’s retreat allowing other major currencies to recover, USDJPY remains strong for the third straight day, continuing its two-week uptrend as positive sentiment supports the risk-sensitive pair. Comments from Japan’s Finance Minister Kato, Bank of Japan Deputy Governor Uchida, and Governor Ueda defending a weaker Yen further bolster USDJPY’s rise as the European session approaches.
An upbeat start to the week, along with stronger Australian PMIs for March, helped AUDUSD rebound after its first weekly loss in three. Meanwhile, NZDUSD remains under pressure, and USDCAD posts a daily loss despite a pullback in crude oil prices, driven by tariff optimism.
Market consolidation, along with easing trade and political fears, kept pressure on Gold’s haven demand, contributing to a three-day losing streak for the precious metal. The US Dollar’s resistance to further decline also played a role in the bullion’s fall ahead of key events this week.
Meanwhile, easing supply-crunch concerns have put WTI crude oil’s two-day winning streak to the test, even as the risk-on market mood and a pullback in the US Dollar challenge oil sellers.
Upbeat remarks from the US President's Council of Advisers on Digital Assets, along with a broad risk-on mood, helped Bitcoin (BTCUSD) and Ethereum (ETHUSD) post modest gains. Robert “Bo” Hines suggested that selling some gold from Fort Knox to buy Bitcoin could be considered if it remains budget-neutral. However, a cautious outlook among institutional buyers and ETF outflows continue to challenge crypto bulls.
After a strong start to a data-packed week, traders will focus on the preliminary March PMIs for Germany, the Eurozone, the UK, and the US for clearer direction. Key events include BoE Governor Bailey’s speech, US tariff updates, and news on the Ukraine-Russia ceasefire. Following that, US Durable Goods Orders, Q4 GDP final readings, and the Core PCE Price Index (the Fed's preferred inflation measure) will be crucial.
Given the recent optimism, the US Dollar might face a pullback, but Gold, USDJPY, and crude oil may not benefit. EURUSD, GBPUSD, and the Antipodeans could edge higher, while cryptocurrencies and equities might recover unless the risk-on mood fades or hawkish Fed expectations rise.
May the trading luck be with you!
