Forex-novosti i prognoze od 17-03-2025

US President Donald Trump said he would talk to Russia's Vladimir Putin early Tuesday about ending the Ukraine war, with territorial concessions by Kyiv and control of the Zaporizhzhia nuclear power plant likely to feature prominently in the talks, per Reuters. 

According to Semafor, the Trump administration is considering recognizing Ukraine’s Crimea region as Russian territory as part of any future agreement to end the way.

“Tomorrow morning I will be speaking to President Putin concerning the War in Ukraine. Many elements of a Final Agreement have been agreed to, but much remains. Thousands of young soldiers, and others, are being killed. Each week brings 2,500 soldier deaths, from both sides, and it must end NOW. I look very much forward to the call with President Putin,” Trump wrote on Truth Social. 

Market reaction 

At the time of writing, the Gold price (XAU/USD) is trading 0.04% higher on the day to trade at $3002.    

• USD/CAD softens to around 1.4290 in Monday’s late American session. 
• US Retail Sales rose softer than expected in February, weighing on the US Dollar.
• Crude Oil prices edge higher due to geopolitical risks, supporting the commodity-linked CAD. 

The USD/CAD pair remains on the defensive near 1.4290 during the late American session on Monday. The US dollar (USD) weakens as fears of economic slowdown from US President Donald Trump's protectionist trade policies keep investors cautious on the Greenback. Canada’s February Consumer Price Index (CPI) inflation report will be in the spotlight on Tuesday. 

US Retail Sales rose less than expected in February, adding to concerns about a slowdown in consumer spending. Data released by the US Census Bureau on Monday showed that Retail Sales in the United States climbed 0.2% MoM in February versus -1.2% (revised from -0.9%) prior. This figure came in weaker than the market expectation for an increase of 0.7%. On a yearly basis, Retail Sales came in at 3.1%, compared to 3.9% (revised from 4.2%) in January. 

The discouraging US economic data, along with Trump’s tariff threats, has sparked high levels of uncertainty amongst investors. This, in turn, drags the USD lower against the Canadian Dollar (CAD). Investors will keep an eye on the US Building Permits, Housing Starts and Industrial Production data, which are due later on Tuesday. If the reports show a stronger outcome, this could help limit the USD’s losses in the near term. 

A rise in Crude Oil prices amid the rising geopolitical tensions in the Middle East provides some support to the commodity-linked Loonie. It’s worth noting that Canada is the largest oil exporter to the United States (US), and higher crude oil prices tend to have a positive impact on the CAD value.

• Silver holds at $33.85, struggling to breach the $34.00 resistance as momentum stalls for the third straight session.
• RSI flattens near overbought levels, suggesting bulls may be regrouping before a push toward last year’s $34.86 peak.
• Failure to clear $34.00 could trigger a pullback, with support at $33.39, followed by a key floor at $33.00.

Silver prices consolidated near the $33.80 mark for the third consecutive trading day, with buyers struggling to clear the $34.00 a troy ounce mark. At the time of writing, as the Asian session commences, the XAG/USD trades at $33.85, which is virtually unchanged.

XAG/USD Price Forecast: Technical outlook

Silver's price rally halted once the grey metal peaked yearly at $34.08. Since then, buyers have lacked the strength to drive the precious metal to challenge last year’s peak of $34.86, which, if taken out, would pave the way for testing the $35.00 mark.

Worth noting that the Relative Strength Index (RSI) turned flat near overbought territory. This hints that buyers could be taking a breather before launching an assault to challenge higher prices.

Conversely, XAG/USD failed to conquer $34.00, paving the way for a pullback. The first support would be the February 14 high of $33.39. A breach of the latter will expose the $33.00 figure, followed by the 50-day Simple Moving Average (SMA) at $30.57.

XAG/USD Price Chart – Daily

• NZD/USD was seen trading around the 0.5825 zone ahead of the Asian session, extending its bullish momentum.
• The pair surged past the 20-day SMA, though traders should monitor 0.5700, where a bearish crossover between the 20 and 100-day SMAs could develop.
• Immediate resistance stands near 0.5850, while initial support lies around 0.5750, with a critical level at 0.5700.

NZD/USD continued its strong performance on Monday ahead of the Asian session, gaining traction and trading near the 0.5825 area. Bulls propelled the pair higher, breaching the 20-day Simple Moving Average (SMA) and reinforcing the bullish outlook. However, market participants should remain cautious as a potential bearish crossover between the 20 and 100-day SMAs around 0.5700 could threaten the rally.

The Relative Strength Index (RSI) has risen sharply into near-overbought territory, currently hovering around 68, suggesting strong bullish momentum. Additionally, the Moving Average Convergence Divergence (MACD) is printing rising green bars, signaling increasing buyer strength. While the technical picture remains favorable for further gains, traders should watch for potential signs of exhaustion at current levels.

On the upside, immediate resistance is seen at 0.5850, with a breakout above this level opening the door to 0.5900. Meanwhile, initial support lies at 0.5750, followed by a crucial floor at 0.5700, where a bearish SMA crossover could add downward pressure. If the pair slips below this threshold, the outlook could shift in favor of the bears.

NZD/USD daily chart

Newly-minted Canadian Prime Minister Mark Carney has hit the ground running on anti-Trump rhetoric as the new Canadian PM gears up to announce a national election in the coming days, and capitalize on Trump tensions that have sewered the US President's approval ratings amongst consumers and voters in recent weeks.

PM Carney specifically noted that Donald Trump's slanderous comments about Canada becoming a state and continuing to refer to the Canadian Prime Minister as "Governor" will need to be rectified. PM Carney added further fuel to the fire meant to get under Trump's skin by extending a formal invitation to the President of Ukraine Volodymyr Zelenskyy to the upcoming G7 meeting, to be hosted by Canada in June.

Canadian PM Carney also noted that Canada is toying with canceling its standing orders for US-produced F-35 fighter planes, noting that Canada has the manufacturing and technology capabilities to produce its own version of the modern-era warplane.

Key highlights

• AUD/JPY was seen trading around the 95.30 area ahead of the Asian session, extending its rally.
• The pair climbed above the 20-day SMA, with indicators shifting into positive territory, suggesting sustained bullish momentum.

AUD/JPY surged on Monday ahead of the Asian session, gaining traction and trading near the 95.30 zone after a strong bullish advance. Buyers took control, pushing the pair beyond the 20-day Simple Moving Average (SMA), signaling a shift in momentum that could sustain further gains in the near term.

The Relative Strength Index (RSI) is trending higher in positive territory, reflecting the renewed strength of buyers, while the Moving Average Convergence Divergence (MACD) is printing rising green bars, reinforcing the improving outlook. The bullish crossover in momentum indicators suggests that the pair could maintain its upward trajectory.

Looking ahead, immediate resistance is seen at 95.50, with a breakout above this level paving the way toward 96.00. On the downside, initial support lies near 94.50, followed by a stronger floor around 94.00. As long as the pair holds above the 20-day SMA, the short-term outlook remains constructive for bulls.

AUD/JPY daily chart

• China’s fresh monetary stimulus announcement bolsters investor sentiment, lifting demand for risk-sensitive assets.
• Traders await the Federal Reserve’s monetary policy decision and Australian labor market data for February.
• Technical indicators suggest a strong bullish outlook with AUD/USD breaking above key moving averages.

The AUD/USD pair surged higher on Monday, benefiting from improved risk sentiment following China’s monetary stimulus measures. The Australian Dollar strengthened broadly as investors reacted positively to the prospect of increased liquidity in the Chinese economy. Meanwhile, traders are turning their attention to upcoming events, including the Federal Reserve’s (Fed) policy decision and Australia’s employment data for February, which could provide further direction for AUD/USD.

Daily digest market movers: Australian Dollar strengthens as risk sentiment improves

• The Australian Dollar extended Friday’s rally, with AUD/USD climbing into the upper 0.6300s, marking a three-week high. The pair’s gains unfolded alongside a weaker US Dollar Index (DXY), which remained near multi-month lows around 103.30 due to persistent trade tensions and falling Treasury yields.
• China’s fresh monetary stimulus announcement provided a strong tailwind for the Aussie. The move aims to boost domestic demand and improve economic conditions, reinforcing support for risk-sensitive assets like the Australian Dollar.
• Trade tensions remain a key market driver. Uncertainty surrounding Washington’s unpredictable trade policies has left investors on high alert, as potential retaliatory measures from major US trading partners could escalate global trade conflicts. Given Australia’s reliance on commodity exports to China, market participants are closely monitoring US tariffs on Chinese imports.
• Fed policy expectations remain in focus. Investors anticipate that the Fed will keep rates steady at 4.25%-4.50% when it announces its decision on Wednesday. While some expect rate cuts later in the year, the central bank’s guidance will be crucial in shaping near-term US Dollar trends.
• Australia’s employment data for February, due on March 20, will be closely watched for clues on the Reserve Bank of Australia’s (RBA) next policy moves. The data is expected to impact speculation about potential rate adjustments in the coming months.

AUD/USD technical analysis: Bulls push the pair above key resistance levels

The AUD/USD rose on Monday, reaching the 0.6390 region during the American session, marking its strongest performance in over a week. The pair gained momentum as technical indicators turned decisively bullish with key levels being breached.

The Moving Average Convergence Divergence (MACD) indicator printed a fresh green bar, signaling renewed upside pressure. Meanwhile, the Relative Strength Index (RSI) climbed to 63, entering a strong bullish zone and confirming rising buying interest.

AUD/USD has surged above both the 20-day and 100-day Simple Moving Averages (SMA), reinforcing a positive outlook. If upside momentum persists, the next resistance lies near 0.6420, while initial support is seen around 0.6320 in case of a pullback.

• USD/JPY climbs 0.34%, extending its two-day rally, with buyers eyeing the critical 150.00 level.
• US Retail Sales data impresses, but weak manufacturing figures cast doubts on economic momentum.
• Technical outlook: A daily close above 150.00 could open the door to 150.67, while support lies at 149.00.

The USD/JPY rose for the second straight day, climbing past the 149.00 figure late in Monday after US economic data was mixed, following good Retail Sales data and a dismal New York Fed Empire State Manufacturing Index report. At the time of writing, the pair gains over 0.34%.

USD/JPY Price Forecast: Technical outlook

The USD/JPY is downward biased despite rebounding near 146.50. This exacerbated a 250-pip rally capped by the Tenkan-sen dynamic resistance at 148.36. Although the latter has been cleared, buyers cannot conquer the next key ceiling level, which is seen at 150.00.

A daily close above the latter could drive the USD/JPY toward the Senkou Span A at 149.51, followed by the Kijun-sen at 150.67.

On the other hand, if USD/JPY struggles at 150.00, the first support is 149.00. On further weakness, sellers could push the exchange rate toward the Tenkan-sen at 148.36, ahead of 148.00, followed by the March 13 low of 147.41.

USD/JPY Price Chart – Daily

• Gold trades at $2,999, rising 0.40% as traders brace for the Federal Reserve’s policy decision on Wednesday.
• US Retail Sales disappoint, while manufacturing activity plummets, fueling recession fears and boosting rate cut expectations.
• Weaker US Dollar and lower Treasury yields support bullion with the 10-year T-note yield slipping to 4.308%.

Gold price rises on Monday late in the North American session, hoover near the $3,000 mark for the second straight day, after data from the United States (US) shows the economy is cooling. The XAU/USD trades at $2,999, up over 0.40%.

Risk appetite improved as reflected by US equities with traders shrugging off a weak US Retail Sales report for February. In addition, the New York Fed Empire State Manufacturing Index plunged, sparking fears that the economy might be tipped into a recession.

Therefore, money market futures are pricing in 64 basis points (bps) of easing by the Federal Reserve (Fed) toward the end of the year.

The main event during the week is the Fed’s monetary policy decision on Wednesday, followed by Fed Chair Jerome Powell's press conference and the release of the Summary of Economic Projections (SEP).

In the meantime, Bullion continued to climb, sponsored by falling US Treasury yields and a weaker US Dollar. The US 10-year T-note yield dropped one basis point to 4.308%. At the same time, the US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, fell 0.35% to 103.37.

Daily digest market movers: Gold price is unfazed by high US real yields, extends rally

• US real yields, as measured by the US 10-year Treasury Inflation-Protected Securities (TIPS) yield, which correlates inversely to Gold prices, rose four bps to 2.00% via Reuters.
• February US Retail Sales improved, increasing by 0.2% MoM, missing forecasts of 0.6%, up from January’s -1.2% plunge.
• The New York Fed showed that manufacturing activity dipped from 5.7 to -20, with input prices increasing to their highest level in over two years.
• Despite recent cooler-than-expected inflation data, economists caution that tariffs on US imports could lead to a renewed inflationary uptick in the coming months.
• UBS projects Gold to reach $3,200 in 2025. “With the price now reaching our long-held target of $3,000/oz, the main question is whether the rally will continue. We think so, as long as policy risks and an intensifying trade conflict continue to spur safe-haven demand,” UBS said.

XAU/USD technical outlook: Gold price struggles to hold above $3,000

Gold prices remain near record highs yet fail to advance sharply as the Relative Strength Index (RSI) has exited overbought territory, opening the door for a pullback. It should be said there is a negative divergence with XAU/USD reaching higher prices, while the RSI failed to print new peaks.

Nevertheless, if XAU/USD clears the previous record high of $3,004, the next resistance would be $3,050 and $3,100. Conversely, a daily close below $3,000 could sponsor a retracement toward the February 20 daily high at $2,954, followed by the $2,900 mark.

After months of on-again, off-again tariff proposals that spawn out of US President Donald Trump's social media accounts, newly-minted US Trade Representative (USTR) Jamieson Greer has attempted to smooth down the worst edges of the Trump administration's jagged policy proposals.

Greer took over the top spot as USTR at the end of February, and has begun the heavy lifting of trying to claw back some of the volatility that markets have been struggling with as a result of Donald Trump's roughshod trade policy strategy.

USTR Greer has reinstated formal channels for US businesses and stakeholders to provide the White House with direct feedback on incoming tariff plans, which include President Trump's often-reiterated plans to impose sweeping "reciprocal" and "sectoral" tariffs on April 2nd.

The Greenback extended Friday’s bearish tone, hovering near the lower end of its recent range amid persistent concerns over a potential US economic slowdown and rising prudence pre-FOMC.

Here is what you need to know on Tuesday, March 18:

The US Dollar Index (DXY) added to Friday’s pullback and remained in the low-103.00s on Monday. Building Permits and Housing Starts are due seconded by Import/Export Prices, Industrial and Manufacturing Production and the API’s weekly report on US crude oil supplies.

EUR/USD rose modestly and managed to surpass the key 1.0900 barrier once again following the weaker note in the US Dollar. The Economic Sentiment in Germany and the Euroland will be at the centre of the debate, followed by the Balance of Trade results in the bloc.

GBP/USD reversed two daily pullbacks in a row and flirted with the 1.3000 milestone amid renewed USD selling. Next of relevance across the Channel will be the labour market report and the BoE’s interest rate decision, both due on March 20.

USD/JPY built up on Friday’s marked advance and trespassed the 149.00 hurdle once again, although the bullish impetus lost some traction afterwards. The Tertiary Industry Index will be released.

AUD/USD broke above the 0.6300 mark with certain conviction and printed new multi-day highs in response to the generalised upbeat tone in the risk complex. The RBA’s Hunter is due to speak.

Prices of WTI rose markedly, managing to extend Friday’s gains and advance past the $68.00 mark per barrel.

Gold prices kept the constructive tone in place and hovered around the key $3,000 region per troy ounce following the slightly offered Dollar and mixed US yields. Silver prices retreated modestly, retesting the $33.50 region per ounce following Friday’s tops past the $34.00 yardstick.

• The Canadian Dollar climbed 0.65% on Monday, supported by barrel bids.
• A general weakening in the US Dollar is further helping the Loonie.
• Canadian inflation data is due on Tuesday, expected to show another rise in inflation.

The Canadian Dollar (CAD) lurched higher by around two-thirds of one percent on Monday, bolstered by a geopolitical spike in Crude Oil prices, as well as a broad-market softening in Greenback bids that helped the Loonie gain a much-needed leg up.

Crude Oil prices lurched higher to kick off the new trading week, with West Texas Intermediate (WTI) barrel prices finding the $68 per barrel figure after US President Donald Trump vowed to take Houthis to task over the group’s ramp-up of hostilities against civilian tanker ships in the Red Sea. While Middle East shipping lanes have little to do with North American Crude Oil markets, which are generally contained within industrial supply lines between Canada and the US, a general ramp-up of hostilities targeting shipping lanes tends to spark additional fear in commodity markets, juicing energy costs higher.

Canadian Consumer Price Index (CPI) figures are in the barrel for Tuesday, and are expected to show another broad uptick in Canadian inflation pressures. An upside print in key inflation metrics bodes poorly for the Bank of Canada (BoC), which slashed interest rates again last week despite an expected upturn in inflation on the cards. The BoC is cutting rates in order to try and increase affordability in the runaway train that is the Canadian housing market. Unfortunately for BoC head Tiff Macklem, last week’s rate cut heading directly into another inflation upswing caused a general spike in Canadian bond markets, which most Canadian mortgages are priced against, causing housing funding costs to increase, not decrease.

Daily digest market movers: Canadian Dollar climbs ahead of key CPI inflation 

• The Canadian Dollar’s Monday rally pushed USD/CAD back below both the 1.4300 handle and the 50-day Exponential Moving Average (EMA) at 1.4325.
• The Trump administration is gearing up for a direct conflict with Houthis in the Red Sea as the Middle East group vows to step up attacks on civilian and military ships in key supply lines.
• Annualized headline Canadian CPI inflation is expected to accelerate to 2.1% YoY on Tuesday, up from the previous print of 1.9%.
• Core BoC CPI inflation continues to ride above the Canadian central bank’s 2.0% target, but markets are struggling to nail down a consistent forecast for Tuesday’s print.
• Markets are gearing up for another Federal Reserve (Fed) rate call this week, due on Wednesday.

Canadian Dollar price forecast

The Canadian Dollar’s Monday rally has put the Loonie back on pace to break out of its ongoing consolidation pattern against the US Dollar. USD/CAD has fallen back below 1.4300 as the CAD gains ground, but the next key technical level will be the 1.4200 handle.

Despite Monday’s push lower in USD/CAD bids, the pair remains firmly entrenched in a sideways channel that has plagued the pair since December. CAD bidders will need to crack both the 1.4100 handle and the 200-day EMA at 1.4040 before a new Loonie rally can be confirmed.

USD/CAD daily chart

• DXY dips toward session lows as traders brace for Trump-Putin meeting.
• US Retail Sales disappoint, reinforcing concerns over economic momentum.
• Federal Reserve decision looms with markets positioning cautiously.
• Technical indicators suggest potential stabilization after sharp losses.

The US Dollar remains under pressure at the start of the week, drifting lower as investors digest softer-than-expected Retail Sales data and brace for key political developments. On Tuesday, President Donald Trump is set to engage in discussions over Ukraine with Russian President Vladimir Putin. Meanwhile, bond yields are directionless as traders await the Federal Reserve's (Fed) policy update on Wednesday, a crucial event that will shape market sentiment moving forward.

Daily digest market movers: Geopolitical tensions and economic uncertainty ahead of Fed meeting

• President Trump confirmed he will engage in talks with Putin on Tuesday, emphasizing that discussions will center around land agreements and resource allocations in Ukraine. The US leader suggested that a resolution is possible, though uncertainties remain.
• US Retail Sales figures for February came in weaker than forecast, exacerbating concerns over consumer spending trends.
• Monthly Retail Sales rose just 0.2%, falling short of the projected 0.7% increase, following a downward revision for January’s contraction to -1.2% from -0.9%.
• Annualized sales growth slowed to 3.1%, down from a revised 3.9% (previously 4.2%), signaling a cooling in consumer demand.
• The CME FedWatch Tool indicates an overwhelming consensus that the Fed will maintain current interest rate levels at Wednesday’s meeting. However, expectations for a potential rate cut in May have inched higher, reaching nearly 30%.
• US Treasury yields exhibit a mixed performance ahead of the Fed’s decision as traders assess the balance between slowing economic indicators and inflationary risks.

Technical outlook: Stabilization in sight?

The US Dollar Index (DXY) struggles to hold ground below 104.00, but with momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) signaling oversold conditions, a temporary relief bounce could materialize. Key resistance stands at 104.50, while immediate support rests near 103.50. Despite some signs of stabilization, broader sentiment remains fragile amid lingering geopolitical and economic uncertainty.

• Mexican Peso extends gains, while US data takes a backseat; Trump tariffs pose new risks.
• US Retail Sales beat expectations, but manufacturing activity in New York collapses, keeping the US Dollar under pressure.
• OECD warns Trump’s tariffs could trigger a Mexican recession as economic growth forecasts remain well below government targets.

The Mexican Peso extended its gains against the US Dollar for the fourth consecutive trading day as Mexican financial markets remained closed due to a national holiday. Data from the United States (US) was overshadowed by an “unexpected” optimism in the financial market as most US equity indices recovered. The USD/MXN trades at 19.87, down 0.20%.

Wall Street traded with modest gains on Monday. Following a decent February Retail Sales report, the US Dollar treads water, while activity plummeted in the NY Fed Empire State Manufacturing Index. All this happened as the Mexican economic docket remains absent with traders awaiting the release of Aggregate Demand and Private Spending figures on March 19 and 20, respectively.

In the meantime, the Organization for Economic Cooperation and Development (OECD) claimed that US President Donald Trump’s tariffs on Mexican products could spur a recession in Mexico, alongside an economic slowdown in the US.

Private economists polled by Banco de Mexico in February revealed they expect the economy to grow at a 0.81% pace. Nevertheless, last Friday’s dismal Industrial Production figures and a deterioration in Consumer Confidence would likely weigh on the economy, which is expected to miss the Finance Minister's forecasts above the 2% threshold.

Daily digest market movers: Mexican Peso unfazed by OECD’s economic projections

• Banxico is expected to continue easing policy at the March 27 meeting spurred by the evolution of the disinflation process and a stagnant economy.
• Last Wednesday, Mexican Finance Minister Edgar Amador Zamora said the national economy is expanding but shows signs of slowing down linked to trade tensions with the US.
• The OECD updates its forecasts, which include 25% tariffs applied on most goods from April. According to the OECD, the US economy is projected to grow by 2.2% in 2025 and 1.6% in 2026.
• The OECD projects that Mexico’s economy will be severely impacted, contracting -1.3% in 2025 and -0.6% next year.
• US Retail Sales in February rose by 0.2% MoM, missing estimates of 0.6%, and improved compared to January’s -1.2% fall.
• The New York Fed showed that manufacturing activity dipped from 5.7 to -20, with input prices increasing to their highest level in more than two years.
• Money market has priced in 64 basis points of easing by the Fed in 2025, which has sent US Treasury yields plunging alongside the American Currency.
• Trade tensions between the US and Mexico remain in focus with the Mexican Peso's outlook hinged on negotiations. A trade agreement could support a currency recovery, easing economic uncertainty. Nevertheless, higher tariffs and the USD/MXN may continue rising as protectionist policies could dampen Mexico’s economic growth, potentially leading to a recession.

USD/MXN technical outlook: Mexican Peso climbs as USD/MXN drops below 20.00

The USD/MXN remains below the 20.00 figure, which keeps sellers hopeful of lower spot prices. Nevertheless, if they're going to revisit 2024 levels, they must clear the 200-day Simple Moving Average (SMA) at 19.65. In that outcome, the next key support levels would be 19.50, 19.00, and August 20, 2024 low at 18.64.

Otherwise, if USD/MXN rallies past 20.00, this would clear the path to test the 100-day SMA at 20.35.

• The Dow Jones rallied 300 points on Monday as the index extends its rebound.
• Equities are recovering their stance after a recent plunge on geopolitical concerns.
• US Retail Sales figures from February recovered, but not by much.

The Dow Jones Industrial Average (DJIA) climbed around 300 points on Monday as equities continue to claw back ground after a recent downturn that saw major indexes inch toward correction territory. US economic data continues to hint at a possible slowdown looming ahead, but oversold equity markets are shrugging off the warning signs falling too far, too quickly over the last few weeks.

US Retail Sales rebounded to a tepid 0.2% MoM in February after January’s plunge. Markets were hoping for a better showing from key retail activity results, with a median forecast of 0.7%. Data watchers will note that January’s figure was also revised to a two-year low of -1.2%, and downside revisions will continue to plague the economic calendar as US data continues to worsen on the front end of the curve.

Despite a near-term rebound in equity markets, key indexes remain steeply lower in March, sparked by overarching tariff threats from the Trump administration. US President Donald Trump has played fast and loose with his constantly changing tariff threats, introducing a new level of policy friction that markets have yet to become accustomed to. Despite President Trump flat-out refusing to acknowledge a growing risk of recession at the hands of his trade policies, key comments from people within his administration have tipped their hands that Trump’s team expect some “economic pain”. However, the Trump administration’s attempt to rebrand economic contraction as “resetting US markets” seems to have gone over rather poorly with investors.

Dow Jones news

The Dow Jones has extended into a second day of recovery gains, with the majority of the major equity index rising on Monday. UnitedHealth (UNH), Walmart (WM), and IBM (IBM) have all risen over 2% on the day. UNH rose back to $500 per share, Walmart climbed back over $85 per share, and IBM has reclaimed $250 per share. On the low end, Nvidia fell back 2.5%, dipping back below $120 per share as the tech rally continues to face difficulties.

Dow Jones price forecast

 The Dow Jones Industrial Average is seeking a technical recovery following a rapid rebalancing of investor expectations: the Dow Jones has climbed 300 points on Monday, adding further momentum to last Friday’s 550-point gain. However, the key index remains steeply off of recent highs, declining over 3,300 points top-to-bottom over the last two weeks. 

Bidding pressure is pushing the Dow Jones back toward the 200-day Exponential Moving Average (EMA) at the 42,000 handle. The DJIA found a technical floor at the 41,000 key price level, but buyers remain at the low end of a particularly steep hole as the Dow trades 3,300 points below record highs set last November just north of 45,000.

Dow Jones daily chart

• EUR/USD was seen trading around the 1.0910 zone after the European session, recovering after recent corrections.
• Despite the bounce, momentum indicators suggest uncertainty, with the RSI returning to overbought territory but the MACD showing weaker green bars.

EUR/USD extended gains on Monday after the European session, climbing toward the 1.0910 area as bulls made a comeback following a brief corrective phase. The pair recovered moderately, but signs of fading momentum persist, making the short-term outlook uncertain.

The Relative Strength Index (RSI) has returned to overbought levels, signaling strong buying interest, yet the Moving Average Convergence Divergence (MACD) is printing weaker green bars, suggesting that bullish momentum could be fading. This mixed picture leaves room for either sideways trading or a potential pullback if buyers fail to sustain the upward push.

On the technical front, immediate resistance is found near 1.0930, and a breakout above this level could open the door for further gains toward 1.0950. On the downside, initial support lies at 1.0880, followed by a stronger floor around 1.0850. If sellers gain traction, the pair could see a deeper retracement in the sessions ahead.

EUR/USD daily chart

• GBP/USD climbs 0.31%, approaching last week's peak of 1.2987 amid broad-based US Dollar weakness.
• US Retail Sales miss forecasts; New York Fed manufacturing activity plunges, heightening recession fears and Fed easing expectations.
• Markets await crucial BoE policy meeting on Thursday; investors betting on steady rates now but pricing future cuts into 2025.

The Pound Sterling advances as the Greenback weakens, testing last week's high of 1.2987. Investors eye crucial monetary policy decisions by the US Federal Reserve (Fed) and the Bank of England (BoE). The GBP/USD trades at 1.2975, up 0.31%.

GBP/USD nears multi-week highs as disappointing US data fuels recession worries, pressuring Treasury yields

The US Dollar remains pressured as Retail Sales in February rose by 0.2% MoM, missing estimates of 0.6% and improved compared to January’s -1.2% fall. Nevertheless, other data revealed by the New York Fed showed that manufacturing activity dipped from 5.7 to -20, with input prices increasing to their highest level in more than two years, revealed the survey.

Recent data shows that the US economy continues to slow down, increasing recession fears. Therefore, traders had priced in 64 basis points of easing by the Fed, which has sent US Treasury yields plunging alongside the American Currency.

The US 10-year Treasury note yields fell four and a half bps to 4.277%. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's performance against a basket of six currencies, dropped 0.34% to 103.38.

The BoE meets on Thursday this week, and it is expected to hold rates unchanged. Despite this, interest rate futures traders estimate 50 bps of easing towards the end of 2025. After this, traders will eye next week’s finance minister Rachel Reeves update on public finances.

GBP/USD Price Forecast: Technical outlook

Price action suggests that the GBP/USD could test the 1.3000 figure in the near-term, after the pair cleared the 200-day Simple Moving Average (SMA) at 1.2793. If the pair exceeds 1.3000 it will be poised th challenge the November 6 swing high at 1.3047, ahead of 1.3100.

Conversely, if GBP/USD struggles at 1.3000, the pair could drop to 1.2911 March 17 daily low, followed by the March 10 through at 1.2861.

• USD/JPY gains to near 149.00 as the Japanese Yen weakens amid an upbeat market mood.
• This week, investors will focus on the BoJ and the Fed’s monetary policy meeting.
• US President Trump’s economic policies are expected to dampen the economic outlook.

The USD/JPY pair moves higher to near 149.00 in Monday’s North American session. The pair gains as the Japanese Yen (JPY) underperforms amid a cheerful market mood. The appeal of risky assets has improved amid optimism over the United States (US)-Russia peace talks on Tuesday.

Earlier in the day, White House officials confirmed that US President Donald Trump will speak with Russian leader Vladimir Putin on peace in Ukraine. Last week, Ukraine agreed to a 30-day ceasefire plan after talks with US officials in Saudi Arabia. An end to a three-year-long war in Ukraine will restore supply chain issues. Such a scenario will be favorable for the global economic growth.

On the domestic front, the major trigger for the Japanese Yen is the Bank of Japan’s (BoJ) monetary policy decision and the National Consumer Price Index (CPI) data for February, which are scheduled for Wednesday and Friday, respectively.

Though investors have underpinned the US Dollar against the Yen it is underperforming its other peers amid fears that US President Trump’s tariff agenda will slow down the economic growth.

Flash Michigan Consumer Sentiment Index declined significantly to at 57.9 in March from 64.7 in February.

This week, investors will pay close attention to the Federal Reserve’s (Fed) interest policy decision, which will be announced on Wednesday.

USD/JPY has been on a downtrend since early January, Rabobank's FX analyst Jane Foley reports. 

Concern from Ueda to disappoint JPY bulls this week

"That said, in the past few sessions there have been signs of some corrective activity. The degree of hawkishness from the BoJ following this week’s policy meeting will likely be a crucial determinant of direction in the currency pair near-term. Further out, we retain our year end forecast of USD/JPY145.00 with downside risk."

"For BoJ watchers, it is hoped that Ueda will this week offer some clarity as to whether the BoJ could hike rates more than once this year. This would likely mean the next rate hike will follow in Q2. In a stable geopolitical backdrop, the likelihood of two more policy moves this year would likely be relatively high." 

"However, evidence of a slowing US economy and uncertainty about Trump tariffs, potentially on Japan’s auto exports to the US, could inject a note of caution into the BoJ’s policy decisions this year. Notes of concern from Ueda on these issues will likely disappoint JPY bulls this week. That said, we would favour selling rallies to USD/JPY150.00 given our longer-term bullish JPY view."

• AUD/USD gains sharply to near 0.6350 as the Australian Dollar outperforms its peers.
• China’s fresh monetary stimulus announcement has boosted Aussie Dollar’s appeal.
• Investors await the Fed’s monetary policy outcome and the Australian Employment data for February.

The AUD/USD pair surges to near 0.6350 in North American trading hours on Monday, the highest level seen in over a week. The Aussie pair strengthens as China’s fresh monetary stimulus plan has increased the Australian Dollar’s (AUD) appeal. An improvement in China’s economic outlook also boosts the AUD’s appeal, given the high dependency of Australian exports on China.

Over the weekend, the Chinese ministry announced a comprehensive “special action plan” to boost consumption and economic growth. The ministry reported that the plan focuses on increasing residents’ incomes, reducing financial burdens, and enhancing the consumption environment, Reuters report.

Meanwhile, upbeat China’s Retail Sales and Industrial Production data for February has also supported the Aussie Dollar.

On the domestic front, the Australian Dollar will be guided by the labor market data for February, which will be released on Thursday. The employment data will influence market speculation for the Reserve Bank of Australia’s (RBA) monetary policy outlook.

The US Dollar (USD) remains on the backfoot as investors expect a United States (US) economic slowdown under the leadership of President Donald Trump. His economic policies are expected to dampen economic activity and boost inflation.

This week, investors will pay close attention to the Federal Reserve’s (Fed) monetary policy decision, which will be announced on Wednesday. The Fed is expected to keep interest rates steady in the range of 4.25%-4.50%.

Pound Sterling (GBP) retains a firm undertone. Investors are looking ahead to this week’s BoE policy decision and expecting a hold amid still sticky UK price trends, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

GBP is firmer on the day

"A split decision is possible, but market pricing is firmly in the camp of no change amid clear messaging from senior policy makers that slow and cautious adjustments in policy are likely moving forward."

"GBP has been carving out a running consolidation just below the 1.30 level over the past week. The pound’s push higher so far today suggests a retest of last week’s 1.2990 high is developing ahead of a push on to the “real” top of the range at the moment at 1.3035. Support is 1.2925/30."

The Euro (EUR) traded narrowly for most of the overnight session before rallying from the upper 1.08s to retest Friday’s intraday high in the low 1.09 area in a spurt of gains through late morning European trade, Scotiabank's Chief FX Strategist Shaun Osborne notes, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

EUR snaps higher through low 1.09s

"Markets are turning more constructive on the EUR outlook on the back of Germany’s fiscal plans. Solid economic data from China, a key export market for Germany, to start the year plus Beijing’s ongoing efforts to boost consumption may be having some positive spillover impact on EUR sentiment." 

"EUR/USD is nudging higher to test minor bull breakout resistance around the 1.09 point in early trade. Spot has found firm support on dips top the low 1.08 area, as expected, over the past week. A 'natural' progression for price is to now test the topside of the range." 

"A push through 1.0900/10 should see gains extend to retest 1.0950/60—the last, major resistance point ahead of a full retest of 1.12."

The Canadian Dollar (CAD) is little changed over the weekend, Scotiabank's Chief FX Strategist Shaun Osborne notes.  

CAD retests key USD support at 1.4350

"There has been scant news on US/Canada tariff issues but PM Carney did remark Friday that there was progress in talks, without specifying what that progress was. The CAD is catching a bit of a bid off the generally softer USD tone to press up against the recent range low (and technical support) for the USD in the mid-1.43s. The USD continues to trade significantly above our fair value estimate (1.4109 currently), suggesting ample downside potential in spot at least." 

"Technical signals are mixed. On the one hand, price moves last week indicated a short-term top/reversal (bearish 'evening star' candle pattern) developed around Tuesday’s spot high. Firm resistance sits at 1.4515/20 now and a little higher still at 1.4545/50." 

"However, the USD enjoys the support of solidly bullish trend momentum across the intraday, daily and weekly charts now which will bolster support around 1.4340/50 (40-day MA and last week’s low). A push under 1.4350 may see spot ease back to 1.4225/50."

The US Dollar (USD) is weaker as US equity futures dip in response to Treasury Secretary Bessent expressing no concern about recent equity market volatility and President Trump saying that reciprocal and sectoral tariffs will be announced on April 2, apparently upping the tariff ante yet again. It was not clear from the remarks whether reciprocal tariffs will be added on top of sectoral tariffs or not, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

President Trump threatens reciprocal and sectoral tariffs April 2

"Stocks perked up nicely on Friday but these comments suggest there is still immense uncertainty ahead for investors to contend with and that there is little chance of a significant pick up in risk appetite for now. US equity futures are weaker on the session currently. International investors may be looking hard at US returns and allocations amid signs of slowing global growth around US tariff action given that, since the election, the USD, US corporate high yield bonds and stocks have underperformed relative to Treasurys and other, foreign assets."

"Meanwhile, policymakers in Europe and China are channeling policy efforts to provide more stimulus (China outlined plans to boost incomes and consumption earlier todfay). More weakness in the USD looks quite likely moving forward. It’s a busy week for central banks but many policy decisions are expected to result in unchanged rates (the Fed, BoE, BoJ, BCCh). The SNB may ease 25bps while the consensus expects a 100bps increase in Brazil’s Selic rate. "

"On the charts, the DXY appears to be breaking down from the consolidation range that held for most of last week when DXY rebounds were capped around 104.05/10. Index losses below 103.7 are bearish on the short-term chart and point to a push to test key support at 103.2; broader points still suggest a drop to the 100/102 range."

• The US Dollar edges lower at the start of the week with all eyes on the Trump-Putin meeting on Tuesday. 
• US bond markets are set to move on the upcoming Fed meeting on Wednesday. 
• The US Dollar Index remains stuck in a tight range after US Retail Sales data on  Monday. 

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, could see an outburst in volatility this week amid geopolitical developments and the Federal Reserve (Fed) meeting. At the time of writing on Monday, the DXY index edges lower and trades near 103.60 after the United States (US) Retail Sales data release for February.

On the geopolitical front, a high-stakes meeting between US President Donald Trump and Russian President Vladimir Putin is scheduled on Tuesday, with the two parties to discuss territory and to divide up certain assets, according to President Trump on Sunday at Airforce One, Bloomberg reported. 

The second big development is in German politics, with a vote on a €1 trillion spending package on Tuesday to boost Europe’s weapon industry, which would spill over into the whole European industry. If an agreement and backing can be reached with the Greens, a two-thirds majority would be present to get the plan through the German Bundestag. 

On the economic data front, all eyes will be on the Federal Reserve (Fed) and the Federal Open Market Committee (FOMC) on Wednesday, where every voting Fed member will be penciling in their projection of where the central bank’s policy rate will be in the near and medium term. Ahead of the Fed’s rate decision and Fed Chairman Jerome Powell’s speech, US Retail Sales for February saw a dreadful revision while current Retail Sales fell flat.

Daily digest market movers: Retail Sales says Customer is fed up

• President Trump said he will speak with Russian President Vladimir Putin on Tuesday as the US presses for an end to fighting in Ukraine, Bloomberg reports. On Sunday, during a flight on Air Force One, President Trump confirmed that the discussion will be about territory and dividing up certain assets, and that there is "a very good chance" for a deal.
• At 12:30 GMT, US Retail Sales for February came out:
• The monthly figure came in at 0.2%, missing the 0.7% from the previous 0.9% contraction in January. It comes even more painful that the -0.9% got revised down to -1.2%. The yearly number was at 4.2% previously and fell to 3.1% while that 4.2% previously got revised to 3.9%.
• At the same time, the NY Empire State Manufacturing Index for March took a beating, contracting by 20, missing the small 1.9 contraction expected, coming from a positive 5.7 in February.
• Equities are not impressing, with another sluggish performance on Monday. US futures are all in the red, while European equities are ticking up in the green.
• The CME Fedwatch Tool sees a 99.0% chance for no interest rate changes in the upcoming Fed meeting on Wednesday. The chances of a rate cut at the May 7 meeting currently stand at 27.5%.
• The US 10-year yield trades around 4.30%, off its near five-month low of 4.10% printed on March 4.

US Dollar Index Technical Analysis: Stuck in a ditch

The US Dollar Index (DXY) is stuck in a range between 103.18 and 103.99. However, seeing the geopolitical risk events and the Fed decision this week, a breakout looks inevitable. Watch out for any false breaks and stick to clear technical levels that make sense, such as the 105.00 round level on the upside and the 101.90 on the downside. 

Upside risk is a rejection at 104.00 that could result in more downturn. If bulls can avoid that, look for a large sprint higher towards the 105.00 round level, with the 200-day Simple Moving Average (SMA) at 105.01. Once broken through that zone, a string of pivotal levels, such as 105.53 and 105.89, will present as caps. 

On the downside, the 103.00 round level could be considered a bearish target in case US yields roll off again, with even 101.90 not unthinkable if markets further capitulate on their long-term US Dollar holdings. 

US Dollar Index: Daily Chart

(This story was corrected on March 17at 12:46GMT to say that the DXY trades near 103.60 after the United States (US) Retail Sales data release for February. not before)

• Retail Sales in the US rose at a softer pace than expected in February.
• The US Dollar Index stays in negative territory near 103.50.

Retail Sales in the United States (US) rose by 0.2% in February to $722.7 billion, the US Census Bureau announced on Monday. This reading followed the 1.2% decrease reported in January and came in worse than the market expectation for an increase 0.7%. On a yearly basis, Retail Sales were up 3.1%.

"Total sales for the December 2024 through February 2025 period were up 3.8% from the same period a year ago," the press release read. "Retail trade sales were up 0.5% from January 2025, and up 3.4% from last year."

Market reaction

This report failed to trigger a noticeable market reaction. At the time of press, the US Dollar Index was down 0.15% on the day at 103.58.

• The Oil price jumps to near $68.00 as China unveils fresh stimulus plan.
• China’s Retail Sales data rose expectedly by 4% in February.
• Investors await US-Russia peace talks and the Fed’s policy decision.

West Texas Intermediate (WTI), futures on NYMEX, posts a fresh weekly high near $68.00 in European trading hours on Monday. The Oil price strengthens on hopes that China’s fresh monetary stimulus plan will boost domestic consumption.

On Sunday, the Chinese ministry announced a comprehensive “special action plan” to ramp up economic growth. The ministry reported that the plan focuses on increasing residents’ incomes, reducing financial burdens, and enhancing the consumption environment, Reuters report.

Such a scenario is favorable for the Oil price given that China is the largest importer of Oil in the world. Meanwhile, China’s upbeat Retail Sales data for February has also offered some strength in the Oil price. The Retail Sales data, a key measure of consumer spending, rose by 4%, as expected.

Going forward, investors will focus on United States (US) President Donald Trump’s talks with Russian leader Vladimir Putin on Tuesday to discuss over a temporary ceasefire with Ukraine. Last week, Ukraine agreed for a 30-day ceasefire after discussing with US officials in Saudi Arabia.

This week, investors will also focus on the Federal Reserve’s (Fed) monetary policy decision, which will be announced on Wednesday. The Fed is almost certain to keep interest rates steady in the range of 4.25%-4.50% for the second time in a row.

China’s January-February economic data was better-than-anticipated. Meanwhile, China unveiled on Sunday a 'Special Action Plan to Boost Consumption' by raising incomes, stabilizing the housing and stock markets, and improving medical and pension services. In fact, rebalancing the economy away from investment toward domestic consumption has been an explicit goal of China since the December 2004 Central Economic Work Conference. However, three major structural constraints prevent any meaningful effort to boost the role consumption plays in the economy, BBH FX analysts report. 

Fiscal reforms to help China achieve the investment-to-consumer pivot

"i) Low household income levels. China household income accounts for 61% of GDP while in the West households retain a larger share of what they produce, typically 70-80% of GDP. China’s investment-driven growth model means that local governments capture a significant portion of economic output due to their control of land sales and infrastructure investment."

"ii) High precautionary savings. Households save a significant portion of their income (over 30% of GDP) due in part to weak social safety nets, falling job security, and an aging population. Moreover, wealth is concentrated among higher-income groups who tend to save more rather than spend. iii) High levels of household debt. Household debt is quite large relative to household income at 145%. For comparison, US household liabilities to disposable income totaled 95% in Q4 2024."

"In our view, fiscal reforms that leads households to have a greater piece of the economic pie in combination with a gradual revaluation of China’s currency could help China achieve that long-overdue investment-to-consumer pivot."

• Gold trades just below $3,000 at the start of this week after posting a fresh all-time high on Friday. 
• Traders brace for a very eventful week with geopolitics and the Federal Reserve decision. 
• Gold could hit $3,020 in the near term, with UBS joining BNP in its projections for $3,200.

Gold’s price (XAU/USD) edges slightly higher and trades around $2,995 at the time of writing on Monday following Friday’s take-profit-led correction after hitting a fresh all-time high of $3,005. Traders are bracing for a rather eventful week with the German Bundestag set to vote on the defense spending plan, which would boost the European industry by €1 trillion, on Tuesday. On that same day, United States (US) President Donald Trump is scheduled to meet Russian President Vladimir Putin on a possible peace deal for Ukraine. 

As if that is not enough, the US Federal Reserve (Fed) and its Federal Open Market Committee (FOMC) convene on Tuesday and Wednesday before issuing its latest monetary policy decision. Traders will be eager to see how every FOMC member will vote and pencil in forward guidance on the Dot Plot (Philips) curve. Expectations are for no change in the monetary policy, while expectations for a rate cut in May or June constantly increase and decrease day over day. 

Daily digest market movers: Looking forward

• President Trump said he will speak with Russian President Vladimir Putin on Tuesday as the US presses for an end to fighting in Ukraine and European nations rush to bolster their support for Kyiv, Bloomberg reports. Trump confirmed that the discussion will be about territory and dividing up certain assets, and there is "a very good chance" for a deal.
• UBS Group AG became the latest bank to raise its price outlook for Gold on increasing chances of a protracted global trade war, a scenario analysts expect will continue to drive investors to scoop up more of the precious metal haven asset. UBS sees the same level as BNP, with Gold trading at $3,200 in the second quarter. 
• The CME Fedwatch Tool sees a 99.0% chance for no interest rate changes in the upcoming Fed meeting on Wednesday. The chances of a rate cut at the May 7 meeting currently stand at 27.5%. 

Technical Analysis: $3,000 to be reclaimed

The $3,000 mark is now the main beacon going forward and needs to hold ground at one point. Seeing the steep surge to a fresh all-time high last week, it is still quite good for the precious metal to fall below the level briefly and allow traders to reenter at a lower price. Once the $3,000 level starts to hold and does not allow any excursion below it, traders can gear up for $3,100 and $3,200 in a couple of weeks or months. 

The new all-time high at $3,004 reached on Friday is the first level to beat once $3,000 is reclaimed again. That mentioned psychologically important $3,000 level faces a double challenge on Monday, with the R1 resistance coming in at $2,999 to reinforce this area. Intraday traders might use this zone to scalp some profit, as the R2 resistance at $3,015 looks a bit too far for the day. 

On the downside, the daily Pivot Point at $2,989 has provided ample support to avoid slippage to the downside earlier in the day. In case Gold reverses below that level, look for the S1 support at $2,973 and the S2 support at $2,962 on the downside. 

XAU/USD: Daily Chart

AUD/USD is firmer on broad US Dollar (USD) weakness and improving Chinese economic activity, BBH FX analysts report. 

Broad USD weakness pushes AUD/USD upwards

"Australia’s Treasurer Jim Chalmers warned that Cyclone Alfred is estimated to reduce Q1 GDP by -0.25pts and lead to upward pressure on inflation. The RBA will look through this temporary negative supply shock. The RBA signaled it will pay particular attention to labor market development to guide future policy decision." 

"Australia’s labor market report is due Wednesday. In the meantime, cash rate futures continue to imply almost 75bps of easing in the next twelve months with the next 25bps cut fully priced-in for July."

USD is expected to edge lower; the major support level at 7.2100 is unlikely to come under threat. In the longer run, current price movements are likely part of a 7.2100/7.2800 consolidation range, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

USD is expected to edge lower

24-HOUR VIEW: "We noted 'a slight increase in upward momentum last Friday,' and we expected USD to 'edge higher.' However, we pointed out, 'any advance is unlikely to reach 7.2650.' Our view did not materialise as USD traded between 7.2312 and 7.2541. From here, there has been a slight increase in downward momentum, and we expect USD to edge lower. However, the major support at 7.2100 is unlikely to come under threat (there is another support level at 7.2200). On the upside, resistance levels are at 7.2400 and 7.2460." 

1-3 WEEKS VIEW: "Last Friday, 14 Mar, when USD was at 7.2490, we revised our view to neutral. We indicated that 'the current price movements are likely part of a 7.2100/7.2800 consolidation range.' We continue to hold the same view."

USD/MXN has breached the lower limit of its multi-month range denoting risk of persistence in decline, Société Générale's FX analysts note. 

USD can also fall towards 19.57 and 19.35

"Next layer of support is located at 19.75/19.68 representing the 200-DMA. Daily MACD is within deep negative territory highlighting a stretched down move. It will be interesting to see if the pair can attempt a bounce and reclaim recent pivot high at 20.40. Inability to defend the MA at 19.68 can result in a deeper pullback towards next projections at 19.57 and 19.35."
 

US Dollar (USD) is expected to trade in a range vs Japanese Yen (JPY), most likely between 147.80 and 149.20. In the longer run, no change in view; USD is expected to trade in a range between 146.50 and 149.50, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Downward momentum has largely faded

24-HOUR VIEW: "Last Friday, we expected USD to 'trade in a range between 147.45 and 148.70.' However, USD traded in a higher range of 147.74/149.02, closing at 148.62 (+0.55%). The price action did not result in a significant increase in upward momentum. We continue to expect range trading today, mostly likely between 147.80 and 149.20." 

1-3 WEEKS VIEW: "Our most recent narrative was from last Wednesday (12 Mar, spot at 148.00), wherein 'downward momentum has largely faded,' and USD 'is likely to trade in a range between 146.50 and 149.50.' There is no change in our view."

The big event this week for GBP FX is the Bank of England meeting on Thursday, Danske Bank's FX analyst Jens Nærvig Pedersen reports. 

German politics and global factors are driving EUR/GBP movements

"We expect an unchanged decision, keeping the Bank Rate at 4.50%. We expect the market reaction to be rather muted but look out for any guidance on altering the gradual approach to cutting interest rates." 

"Our bias is for a swifter cutting cycle than currently priced by markets, which could weigh on GBP FX. For now, German politics and global factors are the main driving force for EUR/GBP. We stay bearish."
 

Increase in momentum suggests potential for NZD to continue to advance; it is unclear whether it can break and remain above the 0.5765/0.5775 resistance zone. In the longer run, upward momentum is building again; NZD must break and remain above the 0.5765/0.5775 resistance zone before a sustained rise is likely, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

NZD to continue to advance

24-HOUR VIEW: "Our expectation for NZD to trade in a range last Friday was incorrect. Instead of trading in a range, NZD soared to a high of 0.5755, closing on a strong note at 0.5750 (+0.93%). The increase in momentum suggests there is potential for NZD to continue to advance. However, it is unclear for now whether NZD break and remain above the 0.6765/0.5775 resistance zone. To sustain the momentum, NZD must remain above 0.5720 (minor support is at 0.5735)." 

1-3 WEEKS VIEW: "Last Friday (14 Mar), when NZD was at 0.5700, we indicated that 'the current price movements are likely part of a range trading phase, most likely between 0.5640 and 0.5765.' We did not expect the subsequent strong advance in NZD that reached 0.5755. Upward momentum is building again, but NZD must break and remain above the 0.5765/0.5775 resistance zone before a sustained rise is likely. The likelihood of NZD breaking clearly above the resistance zone will remain intact as long as 0.5695 is not breached in the next few days."

Brent has experienced a steady pullback after failing to establish above the 200-DMA in January, Société Générale's FX analysts note. 

Below $68.70, next objectives are at $66.80 and $65.70/65.50 

"It has retested the low of last September at $68.70. A brief rebound has materialized however the peak achieved earlier this month at $73.70 could be a short-term resistance. If Brent fails to overcome this hurdle, there would be risk of persistence in decline. Below $68.70, next objectives could be located at projections of $66.80 and $65.70/65.50."

• USD/CAD seems vulnerable near 1.4350 as the US Dollar trades lower ahead of Fed’s policy on Wednesday.
• The Fed is almost certain to keep interest rates steady in the range of 4.25%-4.50%.
• Investors await the US Retail Sales and the Canadian CPI data for February.

The USD/CAD pair struggles to gain ground near the three-day low of 1.4360 in European trading hours on Monday. The Loonie pair trades with caution as the US Dollar (USD) faces selling pressure ahead of the Federal Reserve’s (Fed) monetary policy decision Wednesday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades lower to near 103.55.

Investors expect the Fed to keep interest rates steady in the range of 4.25%-4.50% for the second time in a row. Fed officials have been guiding that borrowing rates should remain at their current levels until they get clarity over new economic policies from US President Donald Trump.

In today’s session, investors will focus on the US Retail Sales data for February, which will be published at 12:30 GMT. Monthly Retail Sales data, a key measure of consumer spending, is estimated to have grown by 0.75 after contracting 0.9% in January.

Meanwhile, the Canadian Dollar (CAD) will be influenced by the Consumer Price Index (CPI) data for February, which will be published on Tuesday. The headline CPI is estimated to have grown by 2.1% in 12 months to February, faster than the 1.9% increase seen in January. An acceleration in price pressures will reduce risks of inflation remaining persistently lower.

USD/CAD holds above the 100-period Exponential Moving Average (EMA), which is around 1.4220, suggesting that the overall trend is bullish.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a sideways trend.

Going forward, an upside move above the March 10 high of 1.4470 will open the door toward the psychological resistance of 1.4500 and the January 30 high of 1.4595.

On the contrary, a breakdown below the February 14 low of 1.4151 by the pair would expose it to the December 9 low of 1.4094, followed by the December 6 low of 1.4020.

USD/CAD daily chart

Scope for Australian Dollar (AUD) to rise further vs US Dollar (USD), but it does not seem to have enough momentum to test 0.6385 (there is another resistance at 0.6365). In the longer run, slightly firm underlying tone suggests AUD is likely to trade in a higher range of 0.6245/0.6385, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

AUD can test the resistance at 0.6365 in short term

24-HOUR VIEW: "We did not anticipate AUD rising sharply to 0.6331 last Friday (we were expecting range trading). Despite the relatively strong advance, upward momentum has not increased much. However, there is scope for AUD to rise further, but it does not seem to have enough momentum to test the major resistance at 0.6385. Note that there is another resistance level at 0.6365. Support is at 0.6315; a breach of 0.6300 would indicate that the current upward pressure has eased." 

1-3 WEEKS VIEW: "We have expected AUD to trade in a range since early last week. In our most recent narrative from last Thursday (12 Mar, spot at 0.6325), we highlighted that 'the slightly firm underlying tone suggests a higher range of 0.6245/0.6385.' There is no change in our view."

January-February activity data beat expectations, supported by fiscal front-loading. Property investment remained in a deep contraction; home prices declined further. Policy support should help contain the downside risk, in our view, with consumption being prioritised, Standard Chartered's economists note. 

Sustaining the momentum is key

"January-February activity data largely beat market expectations, except in property investment. Both new home and used home prices continued to decline compared with December, suggesting that the housing market has yet to find the bottom. On the other hand, strong infrastructure and manufacturing FAI data supported industrial demand, and the government’s commitment to support growth, especially consumption, coupled with seasonal holiday demand, helped retail sales."

"Fiscal stimulus appears to have been front-loaded over 2M-2025. Aggregate total social financing (TSF) growth rose to 8.2% y/y in February on record-high government bond issuance. Fiscal spending appeared to be much higher than over the same period for the last five years; we think this should help correct budget under-implementation, which has weakened fiscal policy effectiveness in recent years. We maintain our GDP growth forecast for 2025 at 4.5%, and see upside risk to our estimate on better-than-expected macro data so far and a high likelihood of further stimulus being rolled out in the event of a significant economic downturn."

"Meanwhile, we see challenges to China achieving its 5% growth target. Domestically, medium- and long-term loans to both households and corporates were lacklustre in 2M-2025, pointing to subdued housing purchases and private investment. CPI inflation dipped to -0.7% in February, still pointing to a supply-demand imbalance. Externally, export growth has slowed notably after the US tariff hikes, with bilateral tensions possibly building up even further."  

In its latest report published on Monday, the Organization for Economic Co-operation and Development (OECD) lowers global growth outlook on trade tensions, seeing stronger inflation pressures.

Additional takeaways

Market reaction

Following these headlines, the US Dollar is seeing a fresh selling wave against its major currency rivals. At the time of writing, the US Dollar Index (DXY) is losing 0.15% on the day at 103.57.

Following these headlines, the US Dollar is seeing a fresh selling wave against its major currency rivals. At the time of writing, the US Dollar Index (DXY) is losing 0.15% on the day at 103.57.

• The Pound Sterling is stuck in a tight range around 1.2950 against the US Dollar, with investors awaiting the Fed-BoE monetary policy outcome later this week.
• US officials, including President Donald Trump, expect economic turbulence from new policies.
• The UK economy contracted by 0.1% and the factory data declined significantly in January.

The Pound Sterling (GBP) trades in a tight range against the US Dollar (USD) around 1.2950 at the start of the week. The GBP/USD pair is expected to trade cautiously as investors await the monetary policy decision from the Federal Reserve (Fed) and the Bank of England (BoE), which will be announced on Wednesday and Thursday, respectively. Both the Fed and the BoE are expected to keep interest rates steady.

According to the CME FedWatch tool, the Fed is almost certain to keep borrowing rates steady in the range of 4.25%-4.50%. This would be the second straight policy meeting in which the central bank will leave interest rates unchanged. Traders have remained increasingly confident about the Fed maintaining a status quo on Wednesday as officials have been arguing in favor of maintaining a “wait and see” approach amid uncertainty over the economic outlook under the leadership of US President Donald Trump.

Market participants expect President Trump’s economic policies to push inflation higher, and weigh on growth prospects in the near term. Flash University of Michigan’s (UoM) survey of consumers in March showed on Friday that respondents see five-year consumer inflation expectations at 3.9%, up from 3.5% projected in February. The preliminary Michigan Consumer Sentiment index came in significantly lower at 57.9 in March compared to estimates of 63.1 and the former reading of 64.7.

A slew of US officials such as President Trump, Commerce Secretary Howard Lutnick, and Treasury Secretary Scott Bessent have guided that Trump’s policies could lead to economic turbulence, but the transition will make America great again. Bessent said in an interview with NBC News on Sunday, “I can predict that we are putting in robust policies that will be durable, and could there be an adjustment,” adding that the country needed to be weaned off of “massive government spending.”  His comments came after the interviewer asked whether Trump’s agenda could lead the economy to a recession.

Daily digest market movers: Pound Sterling to be influenced by BoE’s policy decision

• The Pound Sterling trades with caution against its major peers in European trading hours on Monday. The British currency is expected to remain on tenterhook, with investors focusing on the BoE’s monetary policy announcement on Thursday. Traders are confident about the BoE keeping interest rates steady as a slew of officials have guided a “gradual and cautious” interest rate cut approach.
• Investors will pay close attention to the monetary policy statement and BoE Governor Andrew Bailey’s press conference after the interest rate decision to get cues about the economic and monetary policy outlook.
• An economic contraction in the monthly United Kingdom (UK) Gross Domestic Product (GDP) and a sharp decline in the Industrial and Manufacturing Production data for January have raised concerns over the economic outlook. The BoE also halved its GDP growth forecast to 0.75% in the February policy meeting.
• This week, investors will also focus on the UK labor market data for three months ending January, which will be released on Thursday, too. Investors will keenly focus on the Average Earnings data, a key measure of wage growth that is a major driver of inflation in the services sector. 

Technical Analysis: Pound Sterling consolidates below 1.3000

The Pound Sterling turns sideways after posting a fresh four-month high around the psychological level of 1.3000 against the US Dollar last week. The long-term outlook of the GBP/USD pair remains bullish as it holds above the 200-day Exponential Moving Average (EMA), which is around 1.2700.

The 14-day Relative Strength Index (RSI) holds above 60.00, indicating that the strong bullish momentum is intact.

Looking down, the 50% Fibo retracement at 1.2775 and the 38.2% Fibo retracement at 1.2618 will act as key support zones for the pair. On the upside, the October 15 high of 1.3100 will act as a key resistance zone.

China’s macroeconomic data turned out brighter than expected in Jan-Feb with industrial production, retail sales and urban fixed assets investment (FAI) above Bloomberg’s consensus forecasts. However, the unemployment rate unexpectedly surged while loans data suggested weak demand persisting, UOB Group's Economist Ho Woei Chen notes. 

Broad based improvement in industrial output, retail sales and investment

"Industrial production may fade in Mar as frontloading unraveled after two rounds of US’ tariffs (10% w.e.f. 4 Feb followed by another 10% w.e.f. 4 Mar). However, there is optimism over China’s success in the high-tech sector as well as more positive view on the government’s resolve to stabilise growth at 'around 5%' this year. On Sun (16 Mar), China issued a 30-point plan to boost consumption." 

"To sustain the positive recovery momentum in Jan-Feb, stimulus will need to be stepped up to offset the impact from US’ tariffs and domestic challenges. The data in Jan-Feb suggests that China’s 1Q25 GDP growth may come close to the 5.4% y/y in 4Q24, compared to our expectation for a slowdown to 4.7% y/y and we expect the momentum to raise the full-year 2025 GDP growth to 4.7% compared to our previous forecast of 4.3%. This will be slightly below the official growth target."

All the UK action this week comes on Thursday. That's when we'll see both the next instalment of UK wage data and the Bank of England MPC meeting, ING's FX analyst Chris Turner notes.

The market prices 53bp of BoE rate cuts this year

"On the former, consensus expects little leeway for the BoE to turn more dovish in that private sector wage growth is expected to remain above 6% three-month annualised. And there should not be much of a communication change at the BoE meeting, where we expect a 6-3 vote in favour of unchanged rates."

"Currently, the market prices 53bp of BoE rate cuts this year. Our house view is for 75bp. And a potential catalyst to that dovish re-pricing is next week's Spring Statement from UK Chancellor Rachel Reeves. UK press reports are fixated on which government departments are at risk for spending cuts and the narrative of tighter fiscal policy looks a bearish one for sterling next week."

"With the dollar also fragile, any sterling weakness may well come against the euro or the Japanese yen as investors opt for defensive positioning in equities ahead of the next burst of US tariffs in April. From levels near 193 today, GBP/JPY could well drop back to the 187 area over the coming weeks."

Pound Sterling (GBP) is likely to trade in a 1.2900/1.2970 range. In the longer run, to continue to rise, GBP must break and remain above 1.3000, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

To continue to rise, GBP must break and remain above 1.3000

24-HOUR VIEW: "We indicated last Friday that 'momentum indicators are turning flat,' and we expected GBP to 'trade in a 1.2900/1.2975 range.' Our view of range trading was not wrong, even though GBP traded in a narrower range than expected (1.2911/1.2958), closing modestly lower by 0.10% at 1.2938. The price action provides no fresh clues, and we continue to expect GBP to trade in a range, most likely between 1.2900 and 1.2970." 

1-3 WEEKS VIEW: "Our latest narrative was from last Thursday (13 Mar, spot at 1.2955) wherein 'to continue to rise, GBP must break and remain above 1.3000.' Since then, GBP has not been able to make further headway on the upside. However, only a breach of 1.2880 (no change in ‘strong support’ level) would indicate that the GBP strength that started earlier this month (see annotations in the chart below) has run its course."

Beyond all the uncertainty associated with this year's on-again-off-again US tariffs, one core theme weighing on US interest rates and equities has been the fear of a slowing US consumer. Consumption has been the outsized driver of US growth since the pandemic, and concerns are growing that consumers are ready to spend less and save more as they await clarity on the fallout we could see from the new administration's plans for both the economy and job prospects. Consensus expects a 0.6% month-on-month recovery in the reading after last month's 0.9% drop. Any downside surprise today probably risks weaker equities, lower US interest rates and a weaker US Dollar (USD), ING's FX analyst Chris Turner notes.

DXY looks biased more towards 103.20/30 than 104.00/10

"The big question for investors right now is how hard Washington will push its reset agenda. Equities have been vulnerable to comments that the administration is prepared to accept a slowdown – or perhaps even a recession – as it ushers in a complete reset on global trade and security zones. Given the prospect of sizeable tariffs coming in early next month against Europe and Asia, we suspect risk assets are going to remain fragile on a multi-week view."

"Returning to some of the big events this week, Wednesday sees an FOMC meeting and a new set of Federal Reserve forecasts. No major changes are expected in terms of policy rates, forecasts or communication. We do see the event as a slight upside risk to the dollar, however, as the Fed sticks to just two 25bp cuts this year (61bp currently priced) and Chair Jerome Powell has a good track record of saying the right things to calm the stock market."

"Also in focus will be geopolitics, where US President Donald Trump and Russian President Vladimir Putin are due to hold a phone call on Tuesday. Any progress here is probably further good news for European FX and soft news for the DXY. US equity futures are currently trading down 0.6% even as Asian equity is showing modest gains on the back of a Chinese consumption package. Unless we get some surprisingly strong US retail sales figures today, a heavy-looking US stock market looks likely to keep US rates and the dollar on the soft side. DXY looks biased more towards 103.20/30 than 104.00/10."

Price movements in Euro (EUR) vs US Dollar (USD) are likely part of a range trading phase between 1.0845 and 1.0910. In the longer run, more than week-long rally is taking a pause; EUR is likely to consolidate in a 1.0680/1.0950 range for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

More than week-long rally is taking a pause

24-HOUR VIEW: "Last Thursday, EUR fell to a low of 1.0820. On Friday, we noted a 'mild downward pressure', and we were of the view that EUR 'could edge below 1.0820 but is unlikely to reach 1.0770.' EUR subsequently dipped to 1.0829 before staging a surprising sharp, but brief, rise to 1.0912. EUR closed higher by 0.25% at 1.0879. The price movements are likely part of a range trading phase, probably between 1.0845 and 1.0910." 

1-3 WEEKS VIEW: "After holding positive EUR view for more than a week, we revised our outlook to neutral last Friday (14 Mar, spot at 1.0850). We indicated the following: 'The more than week-long rally is taking a pause, and the current price movements are likely part of a consolidation phase. For now, we expect EUR to trade in a 1.0680/1.0950 range. While this range may seem wide, it is not unexpected given the size of the recent rally.' Our update still stands."

Silver prices (XAG/USD) fell on Monday, according to FXStreet data. Silver trades at $33.73 per troy ounce, down 0.34% from the $33.85 it cost on Friday.

Silver prices have increased by 16.74% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 88.69 on Monday, up from 88.19 on Friday.

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It looks as though EUR/USD can stay relatively supported for the short term, ING's FX analyst Chris Turner notes.

EUR/USD can see a nudge back up to the 1.0930/50 area

"As above, US equities may well keep the dollar on the back foot, and in Europe, the focus will be on fiscal stimulus, defence spending and whether the European Central Bank pauses in its easing cycle at its 17 April meeting." 

"Potentially supportive for the euro this week are: a) Trump and Putin making any progress on Ukraine ceasefire talks, b) the German lower house passing reforms to the debt brake and approving a large fiscal stimulus, and c) ECB President Christine Lagarde potentially tilting the market towards a pause in April when the market is still pricing 14bp of rate cuts at that April meeting."

"The above could see EUR/USD nudge back up to the 1.0930/50 area. EUR/USD could well come under pressure in April as Washington pushes through its reciprocal trade tariffs. 1.05-1.10 is our call for the EUR/USD trading range in the second quarter."

• NZD/USD attracts buyers for the second straight day and climbs to a multi-week top.
• Fed rate cut bets keep the USD depressed near a multi-month low and lend support.
• A positive risk tone also benefits the risk-sensitive Kiwi and contributes to the move-up. 

The NZD/USD pair gains positive traction for the second straight day on Monday and climbs to a three-week high, around the 0.5775 region during the first half of the European session. Spot prices now seem to have confirmed a breakout through a one-week-old range and could appreciate further amid the underlying bearish sentiment surrounding the US Dollar (USD).

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near a multi-month trough amid worries about a tariff-driven slowdown in the US economic activity. Apart from this, softer US inflation figures released last week and signs of a cooling labor market might force the Federal Reserve (Fed) to cut interest rates several times this year. This, in turn, keeps the USD bulls on the defensive and acts as a tailwind for the NZD/USD pair. 

Meanwhile, the global risk sentiment gets a minor boost in reaction to the latest stimulus measures announced by China over the weekend. This is seen as another factor undermining the safe-haven buck and benefiting antipodean currencies, including the Kiwi. Furthermore, the NZD/USD pair's intraday positive move could further be attributed to some technical buying above the 0.5750 horizontal resistance, which might have set the stage for further near-term appreciation. 

However, it remains to be seen if bulls can capitalize on the move or opt to move to the sidelines ahead of this week's key central bank event risk – the outcome of the highly-anticipated two-day FOMC policy meeting on Wednesday. This will play a key role in influencing the USD demand and provide a fresh directional impetus to the NZD/USD pair. In the meantime, traders on Monday will take cues from the release of the US Retail Sales and the Empire State Manufacturing Index. 

Platinum Group Metals (PGMs) trade with a positive tone at the beginning of Monday, according to FXStreet data. Palladium (XPD) changes hands at $970.15 a troy ounce, with the XPD/USD pair advancing from its previous close at $967.75. In the meantime, Platinum (XPT) trades at $998.12 against the United States Dollar (USD) early in the European session, also up after the XPT/USD pair settled at $997.24 at the previous close.

Platinum Group Metals (PGMs) prices mentioned above are based on the FXStreet data feed for Contracts for Differences (CFDs).

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• Silver price maintains its position near the five-month high at $34.08, supported by strong safe-haven demand.
• Houthis take responsibility for attacking the USS Harry S. Truman aircraft carrier.
• Risk sentiment could improve as Trump and Putin are expected to hold talks regarding a potential ceasefire in Ukraine.

Silver price (XAG/USD) continues to lose ground for the second successive day, trading around $33.70 per troy ounce during the European hours on Monday. However, Silver price maintains its position near the five-month high at $34.08, reached on March 14.

Silver receives support from safe-haven flows amid escalating geopolitical tensions in the Middle East. On Sunday, the Houthis claimed responsibility for an attack involving 18 ballistic and cruise missiles, as well as drones, targeting the USS Harry S. Truman aircraft carrier and its escorting warships in the northern Red Sea.

Meanwhile, US Defense Secretary Lloyd Austin reaffirmed that the United States (US) would continue targeting Yemen’s Houthis until they cease their attacks on shipping. The Iran-backed group, in turn, has vowed to escalate its retaliation in response to recent US strikes.

However, the upside of precious metals like Silver could be limited due to potential discussions on a ceasefire in Ukraine that may take place this week, as US President Donald Trump and Russian President Vladimir Putin are expected to engage in talks.

Steve Witkoff, Trump’s envoy, stated on Sunday that he anticipates the two leaders will speak, adding that Putin “accepts the philosophy” of Trump’s ceasefire proposal, according to The Guardian. Last week, the US and Ukraine proposed a 30-day ceasefire to Russia, with Putin reportedly showing support for the initiative.

Additionally, concerns over an escalating trade war, fueled by exchanges of tariffs between the U.S. and its major trading partners, further strengthened Silver's safe-haven appeal. Meanwhile, investors look forward to a series of central bank policy meetings later this week, including the US Federal Reserve’s decision. The Fed is widely expected to keep rates on hold amid uncertainty over President Donald Trump's economic policies.

West Texas Intermediate (WTI) Oil price advances on Monday, early in the European session. WTI trades at $67.44 per barrel, up from Friday’s close at $67.15. Brent Oil Exchange Rate (Brent crude) is also up, advancing from the $70.42 price posted on Friday, and trading at $70.65.

Disclaimer: West Texas Intermediate (WTI) and Brent oil prices mentioned above are based on FXStreet data feed for Contracts for Differences (CFDs).

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European Central Bank (ECB) Vice President Luis de Guindos said on Monday, “trade war is bad news for the world economy, everyone loses in that situation.”

US President Donald “Trump administration has increased economic uncertainty due to tariffs, deregulation,” the ECB official added.

Additional quotes

Market reaction

These comments fail to move a needle around the Euro, with EUR/USD trading flat on the day near 1.0885.

• The US Dollar Index may test its primary support at the four-month low of 103.34.
• The 14-day RSI hovers around 30, indicating oversold conditions and the potential for an upward correction.
• The immediate resistance appears at the nine-day EMA of 104.15.

The US Dollar Index (DXY), which tracks the US Dollar's (USD) performance against six major currencies, remains under pressure for the second straight session, hovering around 103.70 during Monday's European trading hours. Technical analysis of the daily chart suggests a continued bearish outlook, as the index trends lower within a descending channel.

The US Dollar Index is trading below the nine- and 50-day Exponential Moving Averages (EMAs), signaling a weakening short- and medium-term trend. However, the 14-day Relative Strength Index (RSI) hovers around the 30 mark, indicating oversold conditions and the possibility of a rebound.

On the downside, the US Dollar Index could test its key support at the four-month low of 103.34, recorded on November 6, followed by the descending channel's lower boundary at 102.70. A decisive break below this level may strengthen the bearish outlook, potentially driving the index toward the five-month low of 100.68.

The DXY faces immediate resistance at the nine-day EMA at 104.15. A breakout above this level could boost short-term momentum, driving the index toward the 50-day EMA at 106.24, with further upside potential toward the descending channel's upper boundary at 106.60.

US Dollar Index: Daily Chart

• EUR/USD consolidates around 1.0880 to start the week as investors await the Fed’s monetary policy decision on Wednesday.
• The Fed is widely anticipated to keep interest rates steady as the focus shifts to the dot plot and Powell’s comments.
• Greens’ signal to German debt restructuring deal and optimism over Russia-Ukraine peace have uplifted the Euro’s appeal.

EUR/USD trades in a tight range below the key level of 1.0900 in European trading hours on Monday. The major currency pair consolidates as investors await the Federal Reserve’s (Fed) interest rate decision, which will be announced on Wednesday. 

The Fed is almost certain to keep interest rates steady in the current range of 4.25%-4.50%. Therefore, the US Dollar’s (USD) outlook will be guided by the Fed’s dot plot, which shows where officials see interest rates heading in the near and longer term, as well as the growth, employment, and inflation outlook in the Summary of Economic Projections (SEP). In the December meeting, Fed policymakers anticipated two interest rate cuts this year.

Investors will also focus on Fed Chair Jerome Powell’s remarks on the US economic outlook in the press conference following the monetary policy decision. A slew of US officials, including President Donald Trump, have stated that tariff policies could lead to some economic shocks in the near term. On Sunday, US Treasury Secretary Scott Bessent said in an interview with NBC News, “I can predict that we are putting in robust policies that will be durable, and could there be an adjustment,” adding that the country needed to be weaned off of “massive government spending.”  His comments came after the interviewer asked whether Trump’s agenda could lead the economy to a recession.

Last week, US Commerce Secretary Howard Lutnick said that policies by the President are the most important thing America has ever had, and “they worth it” after being asked whether it would be worth executing Trump’s policies even if they led to a recession.

Market participants worry that Trump’s tariff policies could be inflationary and batter households’ consumption. Such a scenario bodes poorly for the US Dollar.

Daily digest market movers: EUR/USD trades in tight range while Euro remains firm

• EUR/USD oscillates in a tight range as the US Dollar consolidates ahead of the Fed’s monetary policy meeting. The Euro (EUR) trades firmly as German leaders, including Franziska Brantner-led-Greens, agreed to set up a 500 billion Euro infrastructure fund and dramatic changes in the borrowing rules or stretch in the so-called ‘debt brake’, which would be approved in the lower house of Parliament on Tuesday.
• Market participants expect the decision of German leaders to boost defense spending through a historic change in the debt brake will prompt economic growth. Ahead of the German leaders meeting on the debt deal, a March 10-14 Reuters poll showed that economists had revised their economic projections for the Eurozone on the optimism over debt reforms to 1.3% for 2026 from 1.2% anticipated a month ago.
• A historic German debt restructuring plan has also increased Eurozone inflation expectations. This scenario is contrary to the European Central Bank’s (ECB) current monetary expansion stance. On Friday, ECB policymaker and Austrian Central Bank Governor Robert Holzmann supported keeping interest rates steady in the April policy meeting. Holzmann's endorsement for a pause in the policy-easing cycle was backed by the assumption that US President Trump’s tariffs and Germany’s defense spending have stemmed risks of a resurge in inflationary pressures.
• Meanwhile, increased hopes of a Russia-Ukraine truce have also improved the Euro’s appeal. Donald Trump is scheduled to meet Russian leader Vladimir Putin on Tuesday to discuss peace in Ukraine. Last week, Ukraine accepted a 30-day ceasefire deal after discussions with US leaders in Saudi Arabia.
• In the near term, the major risk for the Euro is a potential US-European Union (EU) tariff war. On Thursday, President Trump threatened to impose 200% tariffs on European alcohol after the EU proposed retaliatory tariffs on the US against a 25% blanket levy on steel and aluminum imported by the US.

Technical Analysis: EUR/USD trades sideways around 1.0880

EUR/USD trades inside Friday’s trading range around 1.0880 on Monday. The long-term outlook of the major currency pair remains firm as it holds above the 200-day Exponential Moving Average (EMA), which trades around 1.0655.

The pair strengthened after a decisive breakout above the December 6 high of 1.0630 last week. 

The 14-day Relative Strength Index (RSI) wobbles near 70.00, suggesting the strong bullish momentum is intact.

Looking down, the December 6 high of 1.0630 will act as the major support zone for the pair. Conversely, the psychological level of 1.1000 will be a key barrier for the Euro bulls.

• EUR/GBP may strengthen following Germany's agreement on a debt overhaul and a substantial increase in state spending.
• ECB Vice President Guindos noted that President Trump’s policies are contributing to greater economic uncertainty than the COVID-19 crisis.
• The Bank of England is widely expected to maintain its interest rate at 4.5% in its policy decision on Thursday.

EUR/GBP remains stable around 0.8410 during early European trading hours on Monday, following gains in the previous session. The cross's upside potential is bolstered by support for the Euro (EUR) after Germany reached a deal on debt reform and a substantial increase in state spending.

On Friday, incoming Chancellor Friedrich Merz secured an agreement with the Green and Social Democrat parties ahead of a crucial parliamentary vote on Tuesday to revise borrowing rules. If the proposal secures a two-thirds majority, the expanded spending plan could significantly boost the EUR/GBP cross.

Meanwhile, European Central Bank (ECB) Vice President Luis de Guindos voiced concerns on Sunday, stating that President Trump's policies are creating greater economic uncertainty than the COVID-19 crisis, according to Bloomberg. Guindos noted that the new US administration appears less inclined toward multilateralism, which fosters international cooperation—an approach shift that he described as a major source of instability.

Additionally, ECB Governing Council member and Banque de France Governor François Villeroy de Galhau emphasized the need for the Euro to strengthen its global influence. In an interview with *La Tribune Dimanche* over the weekend, he called for the establishment of a "powerful savings and investment union" to attract international investors to the Euro.

The EUR/GBP cross is benefiting from a weaker Pound Sterling (GBP) following Friday’s disappointing UK Gross Domestic Product (GDP) report. The data showed an unexpected 0.1% month-over-month contraction in January, falling short of market expectations for a 0.1% expansion. This decline was primarily driven by weakness in the production sector.

Last month, the Bank of England (BoE) lowered its first-quarter growth forecast to 0.1%, down from the 0.4% projection in November. Investors are now focused on the BoE’s monetary policy decision on Thursday, where interest rates are expected to remain unchanged at 4.5%.

Here is what you need to know on Monday, March 17:

Major currency pairs fluctuate in familiar ranges ahead of this week's highly-anticipated monetary policy announcements by major central banks, including the Federal Reserve (Fed) and the Bank of Japan (BoJ). In the second half of the day, the US economic calendar will feature the NY Empire State Manufacturing Index for March and Retail Sales data for February.

After declining sharply in the first week of March, the US Dollar (USD) Index stabilized and closed the previous week with small losses. Early Monday, the USD Index moves sideways slightly below 104.00. Meanwhile, US stock index futures were last seen losing between 0.5% and 0.7%, reflecting a cautious market mood. US President Donald Trump reiterated early Monday that he will impose reciprocal and sectoral tariffs on April 2, adding that they have no intentions of making exemptions on steel and aluminum tariffs. 

EUR/USD closed marginally higher on Friday after posting losses for two consecutive days. In the European morning on Monday, the pair moves up and down in a narrow channel below 1.0900.

During the Asian trading hours on Monday, the data from China showed that Retail Sales rose by 4% on a yearly basis in February. This reading followed the 3.7% increase recorded in January and came in line with the market expectation. In the same period, Industrial Production expanded by 5.9%, surpassing the market expectation of 5.3%. AUD/USD holds its ground on Monday and trades in positive territory above 0.6330.

USD/CAD lost about 0.5% on Friday and closed the previous week virtually unchanged. The pair stays in a consolidation phase above 1.4350 early Monday. On Tuesday, markets will pay close attention to February Consumer Price Index (CPI) data from Canada.

GBP/USD edged lower in the second half of last week but managed to stabilize above 1.2900. On Thursday, the Bank of England is expected to announce no changes to the monetary policy settings. 

Gold extended its weekly rally to a fresh record-high above $3,000 early Friday before retreating below this level amid profit-taking into the weekend. XAU/USD moves sideways at around $2,990 in the European morning on Monday.

USD/JPY rose more than 0.5% on Friday and continued to stretch higher toward 149.00 at the weekly opening. The BoJ will release monetary policy decisions during the Asian trading hours on Wednesday.

• EUR/JPY climbs to near 162.15 in Monday’s early European session, up 0.30% on the day. 
• The constructive view of the cross prevails above the key 100-day EMA with the bullish RSI indicator. 
• The immediate resistance level emerges at 162.55; the key support level to watch is in the 160.15-160.00 zone. 

The EUR/JPY cross loses momentum to around 162.15 during the early European session on Monday. The encouraging news from China's stimulus measures announced over the weekend provides some support to the Asian equity markets, which undermine the safe-haven currency like the Japanese Yen (JPY). However, the rising bets that the Bank of Japan (BoJ) will raise its interest rates further might help limit the JPY’s losses. 

Technically, the positive outlook of EUR/JPY remains in play as the cross is well-supported above the key 100-period Exponential Moving Average (EMA) on the 4-hour chart. The upward momentum is reinforced by the Relative Strength Index (RSI), which stands above the midline near 61.40, displaying bullish momentum in the near term. 

The first upside target for the cross emerges at 162.55, the upper boundary of the Bollinger Band. Extended gains could see a rally to 163.22, the high of January 22. The additional upside filter to watch is the 164.00-164.10 zone, representing the psychological level and the high of January 24. 

On the other hand, the crucial support level for EUR/JPY is located at the 160.15-160.00 region, the confluence of the round figure, the lower limit of the Bollinger Band and the low of March 13. Sustained trading below the mentioned level could see a drop to the next contention level at 159.68, the 100-period EMA, followed by 158.90, the low of March 10. 

EUR/JPY 4-hour chart

• USD/CHF weakens to near 0.8845 in Monday’s early European session, losing 0.17% on the day. 
• Economic uncertainty and geopolitical risks boost the safe-haven flows, supporting the Swiss Franc.
• The Fed is expected to hold its benchmark Federal Funds Rate at a range of 4.25% to 4.5% on Wednesday. 

The USD/CHF pair attracts some sellers to around 0.8845 during the early European session on Monday. US President Donald Trump's unpredictable trade policy and a series of weak US economic data weigh on the US Dollar (USD) against the Swiss Franc (CHF). Later on Monday, the US February Retail Sales data will be published. 

Optimism that the Trump administration would boost the economy turned into concerns that his trade policies might spark a recession. Data released on Friday indicated that the US Consumer Sentiment Index fell to a nearly 2-1/2-year low in March, but inflation expectations rose amid concerns about the impact of Trump's sweeping tariffs, which have sparked a global trade war.

The US defense secretary said on Sunday that the United States will continue attacking Yemen's Houthis until they stop attacks on shipping as the Iran-aligned group threatened to escalate in response to deadly US strikes the day before.

The escalating trade war between the US and many of its major trading partners, fears about the impact on economies across the world and rising geopolitical tensions in the Middle East could boost the CHF, a safe-haven currency and act as a headwind for the pair. 

The Federal Reserve (Fed) is widely anticipated to keep its interest rate steady at its March meeting on Wednesday. Fed officials, including Fed Chair Jerome Powell, emphasized that they're taking a wait-and-see approach to interest rates since so many economic policies are up in the air.  Investors have priced in two quarter-point rate cuts this year starting in June or July, with a high likelihood of a third by year-end. However, any surprise hawkish comments from the Fed policymakers could lift the Greenback in the near term. 

EUR/USD: EUR amounts

• 1.0600 12.5b
• 1.0760 580m
• 1.0900 735m
• 1.1000 587m

GBP/USD: GBP amounts     

• 1.2745 509m
• 1.3200 600m

USD/JPY: USD amounts                                 

• 147.00 672m
• 147.50 828m
• 149.00 1.1b

AUD/USD: AUD amounts

• 0.6345 473m

USD/CAD: USD amounts       

• 1.4275 559m
• 1.4300 407m

EUR/GBP: EUR amounts        

• 0.8435 879m
• 0.8500 782m

• Gold price remains close to all-time peak as rising trade tensions underpin safe-haven demand.
• Bets that the Fed will cut rates several times in 2025 lend additional support to the XAU/USD. 
• The USD hangs near a multi-month low and further underpins the commodity ahead of the Fed.

Gold price (XAU/USD) struggles to attract any meaningful buyers on Monday, though it remains close to the all-time top – levels beyond the $3,000 psychological mark touched on Friday. Against the backdrop of concerns about escalating trade tensions and a global trade war, geopolitical tensions continue to act as a tailwind for the safe-haven bullion. Apart from this, bets for more interest rate cuts by the Federal Reserve (Fed) further underpin demand for the non-yielding yellow metal.

Meanwhile, the prospects for further policy easing by the US central bank keep the US Dollar (USD) depressed near a multi-month low touched last week, which, in turn, lends additional support to the Gold price. That said, a generally positive tone around the Asian equity markets, bolstered by the optimism over China's stimulus measures announced over the weekend, cap gains for the XAU/USD. Traders also seem reluctant ahead of a two-day FOMC policy meeting starting on Tuesday. 

Daily Digest Market Movers: Gold price bulls retain control amid trade jitters, geopolitical risks and dovish Fed expectations

• US Treasury Secretary Scott Bessent said late Sunday that he is not worried about recent market downturns because corrections are healthy and normal. Commenting on the chance of a recession, Bessent added that there are no guarantees. This, along with worries about the potential economic fallout from US President Donald Trump's trade tariffs, continues to act as a tailwind for the safe-haven Gold price. 
• On the geopolitical front, Houthi leader Abdul Malik al-Houthi, following deadly US airstrikes, said on Sunday that his militants would target US ships in the Red Sea as long as the US continues its attacks on Yemen. In response, the US defense secretary said on Sunday that the US will continue attacking Yemen's Houthis until they stop attacks on shipping, raising the risk of a further escalation of conflict in the region. 
• Meanwhile, an Israeli drone attack in northern Gaza killed at least nine people, including three journalists on Saturday. Israel’s military said that its forces have intervened to thwart threats by terrorists approaching its troops or planting bombs since the January 19 ceasefire took effect. The Israeli military added that six men killed in the strike were identified as members of the armed wings of Hamas.
• Market participants have been pricing in the possibility that the Federal Reserve will lower interest rates several times this year amid worries about an economic downturn on the back of the Trump administration's aggressive trade policies. This comes on top of softer US inflation figures released last week and signs of a cooling labor market, supporting prospects for further policy easing by the US central bank.
• In fact, the Fed funds futures suggest that the Fed could lower borrowing costs by 25 basis points each at the June, July, and October monetary policy meetings. The expectations were further reaffirmed by the University of Michigan Surveys on Friday, which showed that the Consumer Sentiment Index plunged to a nearly 2-1/2-year low in March. This keeps the US Dollar bulls on the defensive near a multi-month low.
• China’s State Council announced a special action plan on Sunday aimed at stimulating domestic consumption and introduced measures to increase household incomes. Adding to this, China’s Shenzhen eased its housing provident fund loan policies to stimulate the property market and clear the overhang. This, in turn, boosts investors' confidence and caps any meaningful gains for the safe-haven XAU/USD pair.
• Traders now look forward to Monday's US economic docket – featuring the release of monthly Retail Sales and the Empire State Manufacturing Index – for some impetus later during the North American session. The focus, however, will remain glued to the crucial FOMC decision on Wednesday, which will influence the USD price dynamics and provide a fresh directional impetus to the non-yielding yellow metal. 

Gold price needs to consolidate before the next leg up; downside potential seems limited amid a bullish technical setup

From a technical perspective, last week's breakout through the $2,928-2,930 horizontal resistance and a subsequent move was seen as a fresh trigger for bulls. That said, the daily Relative Strength Index (RSI) remains close to the overbought territory and is holding back traders from placing fresh bullish bets around the Gold price. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before the next leg up. Nevertheless, the broader setup suggests that the path of least resistance for the XAU/USD pair remains to the upside and supports prospects for an extension of a well-established uptrend witnessed over the past three months or so. 

Meanwhile, any meaningful corrective slide might now attract fresh buyers near the $2,956 resistance breakpoint, below which the Gold price could drop to the $2,930-2,928 horizontal zone. The latter should act as a key pivotal point. A convincing break below might prompt some technical selling and pave the way for deeper losses. The XAU/USD pair might then accelerate the fall towards the $2,900 round figure en route to last week's swing low, around the $2,880 region.

• AUD/JPY advances after the release of key economic data from China on Monday. 
• China announced plans featuring measures to boost wages and stabilize stock and real estate markets. 
• The BoJ is expected to keep its current policy unchanged at its upcoming meeting on Wednesday.

AUD/JPY continues to gain ground for the second successive day, trading around 94.20 during the Asian hours on Monday. The currency cross appreciates as the Australian Dollar (AUD) gains ground against its peers following the release of China’s economic data on Monday. Any developments surrounding the Chinese stimulus plan could boost the AUD, as China is a major trading partner to Australia.

China's retail sales grew by 4% year-over-year in January-February, improving from December’s 3.7% increase. Meanwhile, industrial production rose 5.9% YoY during the same period, exceeding the 5.3% forecast but slightly lower than the previous reading of 6.2%.

The risk-sensitive AUD/JPY cross receives support as the Australian Dollar gains ground and the Japanese Yen (JPY) loses ground amid improving risk sentiment as China unveiled a special action plan over the weekend to revive consumption. The plan includes measures to increase wages, boost household spending, and stabilize stock and real estate markets.

However, the AUD/JPY cross may face upside limitations as the JPY could strengthen amid firm expectations that the Bank of Japan (BoJ) will continue raising interest rates this year. Still, the central bank is widely anticipated to maintain its current policy at its upcoming meeting on Wednesday.

Last week, major Japanese firms agreed to substantial wage increases for the third consecutive year, aiming to support workers against inflation and address labor shortages. Higher wages are expected to drive consumer spending, fuel inflation, and give the BoJ more flexibility for future rate hikes.

US President Donald Trump said early Monday that he “will impose reciprocal and sectoral tariffs on April 2.”

Additional quotes

Market reaction

At the time of writing, US Dollar Index (DXY) is trading flat at 103.73.

Gold prices remained broadly unchanged in India on Monday, according to data compiled by FXStreet.

The price for Gold stood at 8,337.11 Indian Rupees (INR) per gram, broadly stable compared with the INR 8,336.70 it cost on Friday.

The price for Gold was broadly steady at INR 97,240.46 per tola from INR 97,237.68 per tola on friday.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)

• Silver price loses momentum to near $33.80 in Monday’s Asian session. 
• Safe-haven flows and growing industrial demand might continue to support the Silver price. 
• Traders will take more cues from the US February Retail Sales report, which is due later on Monday. 

The Silver price (XAG/USD) edges lower to around $33.80 after reaching its highest level since October 31, 2024, during the Asian trading hours on Monday. Nonetheless, the potential downside for the white metal seems limited due to the economic uncertainty over the impact of a global trade war and a softer Greenback. 

The escalating trade war between the US and many of its largest trading partners has raised concerns about the impact on economies across the world. This, in turn, might boost the safe-haven asset like the Silver. Last week, US President Donald Trump threatened a 200% tariff on any alcohol coming to the US from the European Union (EU). Trump has also raised levies on Chinese imports into the US to at least 20%.

Additionally, supply deficits and growing industrial demand could act as strong tailwinds for the white metal. According to the global investment firm WisdomTree, investors hold a significant portion of it and expect higher prices to encourage sales. Industrial demand for silver has reached all-time highs, owing to its use in photovoltaic applications, 5G technology, and automotive electronics.  

Silver traders will keep an eye on the US Retail Sales report for February, which is expected to grow by 0.7% MoM. In case of a stronger-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term. 

• GBP/USD may aim for immediate resistance at the four-month high of 1.2989.
• If the 14-day RSI exceeds 70, it will signal overbought conditions and a potential downward correction.
• The pair is expected to find immediate support at the nine-day EMA of 1.2895.

The GBP/USD pair extends its losing streak for the third successive session, trading around 1.2940 during the Asian hours on Monday. Technical analysis of the daily chart suggests a continued bullish bias, with the pair moving upwards within an ascending channel pattern.

The 14-day Relative Strength Index (RSI) remains slightly below 70, indicating strengthened bullish momentum. Further gains will indicate an overbought condition and downward correction sooner. Moreover, the GBP/USD pair continues to trade above the nine-day Exponential Moving Average (EMA), reinforcing strong short-term price dynamics and confirming the ongoing upward trend.

On the upside, the GBP/USD pair may challenge primary resistance at the four-month high of 1.2989, reached on March 12, followed by the five-month high at 1.3048, recorded on November 6, and ascending channel’s upper boundary near 1.3050.

The GBP/USD pair is likely to find immediate support at the nine-day EMA of 1.2895. A break below this level could weaken short-term price momentum, potentially driving the pair toward the ascending channel’s lower boundary near 1.2730, followed by the 50-day EMA at 1.2665.

GBP/USD: Daily Chart

• WTI climbs as China unveils new measures to stimulate consumption. 
• Houthis take responsibility for attacking the USS Harry S. Truman aircraft carrier. 
• Oil prices gain support amid waning optimism for a quick resolution to the Ukraine war.

West Texas Intermediate (WTI) Oil price extends its winning streak for a second consecutive session, trading around $67.40 per barrel during Asian market hours on Monday. The gains come as crude prices strengthen following China’s, the world's largest oil importer, announcement of new measures to boost consumption.

On Sunday, Beijing announced a special initiative aimed at reviving domestic consumption. The plan includes wage increases, incentives to boost household spending, and efforts to stabilize stock and real estate markets.

Oil prices also received support from escalating geopolitical tensions in the Middle East, which have raised concerns over supply disruptions. On Sunday, the Houthis claimed responsibility for an attack involving 18 ballistic and cruise missiles, as well as drones, targeting the USS Harry S. Truman aircraft carrier and its escorting warships in the northern Red Sea.

Meanwhile, US Defense Secretary Lloyd Austin reaffirmed that the United States (US) would continue targeting Yemen’s Houthis until they cease their attacks on shipping. The Iran-backed group, in turn, has vowed to escalate its retaliation in response to recent US strikes.

Additionally, crude Oil prices found support from fading hopes for a swift resolution to the war in Ukraine, which could have led to increased Russian energy supplies to Western markets. However, discussions on a potential ceasefire may take place this week, as US President Donald Trump and Russian President Vladimir Putin are expected to engage in talks.

Steve Witkoff, Trump’s envoy, stated on Sunday that he anticipates the two leaders will speak, adding that Putin “accepts the philosophy” of Trump’s ceasefire proposal, according to *The Guardian*. Last week, the US and Ukraine proposed a 30-day ceasefire to Russia, with Putin reportedly showing support for the initiative.

• USD/CAD oscillates in a range near the lower end of a short-term trading range.
• Rising Oil prices underpin the Loonie and caps spot prices amid a bearish USD. 
• Rising bets that the Fed will cut rates several times in 2025 weigh on the buck.

The USD/CAD pair kicks off the new week on a subdued note and oscillates in a narrow band above mid-1.4300s, or the lower end of a one-week-old trading range, during the Asian session. Meanwhile, the fundamental backdrop suggests that the path of least resistance for spot prices is to the downside. 

Against the backdrop of positive news coming out of the US-Canada trade talk last week, a bullish spike in Crude Oil prices is seen underpinning the commodity-linked Loonie. In fact, the commodity touches a two-week high in reaction to the risk of a further escalation of tensions in the Red Sea, especially after the US vowed to continue strikes against Yemen’s Houthis until their attacks ceased. This, along with the underlying bearish sentiment surrounding the US Dollar (USD), validates the near-term negative outlook for the USD/CAD pair. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near a multi-month low amid worries that US President Donald Trump's tariffs and retaliatory measures from other countries could hurt the US economy. Adding to this, softer-than-expected US inflation and signs of a cooling US labor market might force the Federal Reserve (Fed) to cut interest rates several times this year. This keeps the USD bulls on the defensive and should further contribute to capping any attempted recovery for the USD/CAD pair. 

Traders now look forward to the US economic docket – featuring the release of monthly Retail Sales and the Empire State Manufacturing Index – for some impetus later during the North American session. The focus, however, will remain glued to the outcome of the highly-anticipated two-day FOMC policy meeting on Wednesday. This will play a key role in influencing the USD and provide a fresh directional impetus to the USD/CAD pair. In the meantime, bears might wait for weakness below the 1.4350 support before placing fresh bets.

• NZD/USD strengthens after the release of key economic data from China on Monday. 
• China’s Retail Sales grew 4.0% YoY in January-February, improving from December’s 3.7% rise. 
• The US Dollar remains under pressure as the Michigan Consumer Sentiment Index declined in March.

NZD/USD continues its upward momentum for the second consecutive day, trading around 0.5760 during Asian hours on Monday. The pair strengthens following the release of China’s economic data, with Retail Sales increasing by 4.0% year-over-year in January-February, up from December’s 3.7% growth.

Additionally, industrial production expanded by 5.9% YoY, surpassing the 5.3% forecast but slightly below the previous 6.2% reading. Positive economic indicators from China tend to support the NZD, given China’s role as a key trading partner for New Zealand.

After the release of China’s high-impact February activity data, the National Bureau of Statistics (NBS) shared its economic outlook during a press conference on Monday. While noting the economy’s resilience, the NBS highlighted increasing external challenges and a more complex global environment.

Furthermore, the New Zealand Dollar (NZD) gained support after China introduced a special action plan over the weekend to stimulate consumption. The initiative includes wage increases, measures to boost household spending, and efforts to stabilize stock and real estate markets, improving overall market sentiment in the region.

On the domestic front, New Zealand’s Business NZ Performance of Services Index (PSI) declined to 49.1 in February from 50.4 in January, indicating a return to contraction in the services sector.

The NZD/USD pair also advanced as the US Dollar (USD) weakened ahead of the upcoming US Retail Sales data release in the North American session. The Greenback faced pressure after the University of Michigan (UoM) reported a drop in its preliminary Consumer Sentiment Index for March on Friday, falling to 57.9—its lowest level since November 2022—from 64.7 previously. This figure also missed the consensus estimate of 63.1.

• The Japanese Yen kicks off the new week on a subdued note amid mixed fundamental cues.
• A positive risk tone underpins the JPY, though hawkish BoJ expectations limit the downside.
• Traders also seem reluctant ahead of the crucial BoJ and Fed policy decisions later this week. 

The Japanese Yen (JPY) seesaws between tepid gains/minor losses against its American counterpart during the Asian session on Monday amid mixed fundamental cues. The optimism led by China's stimulus measures announced over the weekend is evident from a generally positive tone around the Asian equity markets. This, in turn, is seen as a key factor undermining the safe-haven JPY. 

Any meaningful JPY depreciation, however, remains elusive in the wake of the divergent Federal Reserve (Fed)-Bank of Japan (BoJ) policy expectations. Furthermore, geopolitical risks and worries about the economic fallout from US President Donald Trump's tariffs support the JPY. Apart from this, the underlying bearish sentiment surrounding the US Dollar (USD) should cap the USD/JPY pair. 

Traders might also refrain from placing aggressive directional bets and opt to move to the sidelines ahead of this week's key central bank event risks – the BoJ and the Fed policy decisions on Wednesday. This warrants caution for the JPY bears and positioning for an extension of the USD/JPY pair's recent bounce from a multi-month trough, around the 146.55-146.50 area touched last Tuesday. 

Japanese Yen continues to draw support from BoJ rate hike bets

• China’s State Council announced a special action plan on Sunday aimed at stimulating domestic consumption and introduced measures to increase household incomes. Adding to this, China’s Shenzhen eased its housing provident fund loan policies to stimulate the property market and clear the overhang. This, in turn, boosts investors' confidence and undermines the safe-haven Japanese Yen during the Asian session on Monday.
• The results of Japan's annual spring labor negotiations, which concluded on Friday, showed that companies offered an average wage hike above 5% at least for the second year running to help workers cope with inflation and address labour shortages. Higher wages are expected to boost consumer spending and contribute to rising inflation, which gives the Bank of Japan a fresh reason to keep raising interest rates. 
• Meanwhile, traders continue to ramp up their bets that the Federal Reserve will have to lower interest rates several times this year amid the rising possibility of an economic downturn on the back of US President Donald Trump's trade tariffs. The expectations were reaffirmed by the University of Michigan Surveys on Friday, which showed that the Consumer Sentiment Index plunged to a nearly 2-1/2-year low in March. 
• This comes on top of softer US inflation figures released last week and signs of a cooling labor market, suggesting that the US central bank could resume its policy-easing cycle in June. Moreover, market participants are currently pricing in the possibility of two more 25 basis points Fed rate cut moves each at the July and October monetary policy meetings, which keeps the US Dollar depressed near a multi-month low.
• Houthi leader Abdul Malik al-Houthi said on Sunday that his militants would target US ships in the Red Sea as long as the US continues its attacks on Yemen. This comes a day after deadly US airstrikes, which the Houthi-run health ministry said killed at least 53 people. In response, the US defense secretary said on Sunday that the US will continue attacking Yemen's Houthis until they stop attacks on shipping. 
• According to Palestinian media, an Israeli drone attack on Saturday in northern Gaza killed at least nine people, including three journalists. Israel’s military said that its forces have intervened to thwart threats by terrorists approaching its troops or planting bombs since the January 19 ceasefire took effect. The Israeli military said that six men – identified as members of the armed wings of Hamas – were killed in the strike.
• Traders now look forward to the US economic docket – featuring the release of monthly Retail Sales and the Empire State Manufacturing Index – for some impetus later during the North American session. The focus, however, will remain glued to the crucial BoJ decision on Wednesday. This, along with the outcomes of a two-day FOMC meeting, should provide a fresh directional impetus to the USD/JPY pair. 

USD/JPY struggles to find acceptance above the 149.00 mark

From a technical perspective, the recent repeated failures to find acceptance above the 149.00 mark and negative oscillators on the daily chart favor bearish traders. However, a sustained strength beyond the said handle, leading to a subsequent break through last week's swing high around the 149.20 area, might trigger a short-covering rally and lift the USD/JPY pair to the 150.00 psychological mark. The momentum could extend further towards the 150.65-150.70 zone en route to the 151.00 mark and the monthly peak, around the 151.30 region.

On the flip side, the 148.25 area might protect the immediate downside ahead of the 148.00 mark. Some follow-through selling below the 147.75-147.70 horizontal zone could make the USD/JPY pair vulnerable to accelerate the fall towards the 147.00 mark before eventually dropping to the 146.55-146.50 region or the lowest level since October touched last week. A convincing break below the latter will be seen as a fresh trigger for bears and pave the way for further losses.

• The Indian Rupee gains traction in Monday’s Asian session. 
• The weaker US Dollar broadly supports the INR, but higher crude oil prices might cap its gains. 
• Investors brace for India’s February WPI inflation and US Retail Sales data, which are due later on Monday. 

The Indian Rupee (INR) strengthens on Monday. The concerns about slowing growth in the US economy from US President Donald Trump administration's trade policies weigh on the Greenback and provide some support to the INR. Nonetheless, the upside for the local currency might be limited amid a rise in crude oil prices. It’s worth noting that India is the world's third-largest oil consumer and higher crude oil prices tend to have a negative impact on the INR value. 

Looking ahead, India’s February Wholesale Price Index (WPI) inflation will be released later on Monday. On the US docket, Retail Sales data for February will offer cues on US consumer sentiment and whether policy uncertainty has prompted a slowdown in spending. Investors will closely watch the US Federal Reserve (Fed) interest rate decision on Wednesday, which is expected to keep interest rates unchanged. The primary focus will be on the Fed's policy guidance.

Indian Rupee trades with mild gains amid multiple headwinds

• The Indian Rupee is likely to face strong resistance around 86.50 while finding support in the 87.40-50 zone, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
• India’s economic indicators for February reflect a moderation in inflation, improved industrial output and strong corporate earnings, according to the latest SBI Ecowrap report.  
• India is projected to be the world's third-largest economy by 2028 as it becomes the world's most sought-after consumer market and gains share in global output, driven by macro stability influenced policy and better infrastructure, said Morgan Stanley. 
• The preliminary reading of the University of Michigan (UoM) Consumer Sentiment Index showed that the index reached its lowest since November 2022, falling to 57.9 from 64.7 in the previous reading. This reading came in below the market consensus of 63.1.
• The UoM five-year Consumer Inflation Expectation jumped to 3.9% in March, compared to 3.5% in February.
• Markets widely expect the Fed will stay on hold when it concludes its two-day meeting on Wednesday. The markets have priced in nearly a 75% odds of a quarter-point reduction to the policy rate by June, according to the CME FedWatch tool. 

USD/INR remains capped within a symmetrical triangle

The Indian Rupee trades stronger on the day. The USD/INR pair has consolidated near the lower limit of a symmetrical triangle on the daily chart. The constructive view of the pair remains in place, with the price holding above the key 100-day Exponential Moving Average (EMA). However, further consolidation cannot be ruled out as the 14-day Relative Strength Index (RSI) stands above the midline, suggesting neutral momentum in the near term. 

The immediate resistance level for USD/INR emerges at 87.24, the upper boundary of a symmetrical triangle. Sustained gain above this level could pave the way to 87.53, the high of February 28, en route to an all-time high of 88.00. 

On the flip side, a decisive break below the low of March 6 and the lower limit of the triangle pattern at 86.86 could expose 86.48, the low of February 21. Further south, the additional downside filter to watch is 86.14, the low of January 27. 

Following the publication of the high-impact China’s February activity data, the National Bureau of Statistics (NBS) expressed its outlook on the economy during its press conference on Monday.

Key quotes (via Reuters)

developing story ...

Market reaction

AUD/USD is holding mild gains above 0.6300, up 0.13% on the day, at the press time.

• The Australian Dollar remains steady following the release of key economic data from China on Monday.
• China's Retail Sales rose 4% YoY in January-February, up from December’s 3.7% increase.
• Market expectations suggest that the Fed will keep its current policy stance unchanged on Wednesday.

The Australian Dollar (AUD) remains steady against the US Dollar (USD) following the release of China’s economic data on Monday. Additionally, the AUD/USD pair gained ground as the US Dollar (USD) edges lower ahead of Retail Sales data release later in the North American session.

China's retail sales grew by 4% year-over-year in January-February, improving from December’s 3.7% increase. Meanwhile, industrial production rose 5.9% YoY during the same period, exceeding the 5.3% forecast but slightly lower than the previous reading of 6.2%.

The AUD could gain ground as China unveiled a special action plan over the weekend to revive consumption, lifting market sentiment across the region. The plan includes measures to increase wages, boost household spending, and stabilize stock and real estate markets. Any positive developments surrounding the Chinese stimulus plan could boost the Australian Dollar, as China is a major trading partner to Australia.

The AUD/USD pair may receive support from improving risk sentiment amid reports of a potential ceasefire discussion between US President Donald Trump and Russian President Vladimir Putin this week. Trump’s envoy, Steve Witkoff, stated on Sunday that he expects the two leaders to speak, adding that Putin “accepts the philosophy” of Trump’s ceasefire and peace terms, according to The Guardian.

Australian Dollar gains ground amid improved risk sentiment

• The US Dollar Index (DXY), which measures the USD against six major currencies, edges lower and is trading around 103.70 at the time of writing. However, the Greenback faced headwinds after the University of Michigan (UoM) reported a decline in its preliminary Consumer Sentiment Index for March on Friday, falling to 57.9—the lowest since November 2022—from the previous reading of 64.7. This figure also came in below the consensus estimate of 63.1. Meanwhile, the UoM five-year Consumer Inflation Expectation jumped to 3.9% in March, compared to 3.5% in February.
• Markets widely anticipate that the Federal Reserve (Fed) will maintain its current policy stance when it concludes its two-day meeting on Wednesday. According to the CME FedWatch tool, traders have priced in nearly a 75% probability of a quarter-point rate cut by June.
• On Sunday, the Houthis declared that they had launched an assault involving 18 ballistic and cruise missiles, along with drones, aimed at the USS Harry S. Truman aircraft carrier and its escorting warships in the northern Red Sea. Meanwhile, the US defense secretary stated that the United States would continue striking Yemen's Houthis until they cease attacks on shipping, as the Iran-aligned group vowed to escalate in retaliation for deadly US strikes the previous day.
• US Treasury Secretary Scott Bessent said late Sunday that he was not concerned about the stock market despite multiple declines triggered by Trump's tariff threats. "I've been in the investment business for 35 years, and I can tell you that corrections are healthy. They're normal. What's not healthy is a market that only moves straight up," Bessent stated.
• US President Donald Trump’s decision to uphold a 25% tariff on Australian aluminum and steel exports, valued at nearly $1 billion. This move adds strain to Australia’s trade outlook, impacting major exports.
• Australian Prime Minister Anthony Albanese confirmed that Australia will not impose reciprocal tariffs on the US, emphasizing that retaliatory measures would only raise costs for Australian consumers and fuel inflation.

Technical Analysis: Australian Dollar maintains position above 0.6300, nine-day EMA

The AUD/USD pair is hovering around 0.6340 on Monday, maintaining a bullish outlook after reclaiming its position within the ascending channel on the daily chart. The 14-day Relative Strength Index (RSI) has also rebounded above 50, further supporting the positive momentum.

Immediate support is seen at the nine-day Exponential Moving Average (EMA) of 0.6309, followed by the 50-day EMA at 0.6306 and the lower boundary of the ascending channel. A decisive break below this critical support zone could weaken the bullish bias, exposing the AUD/USD pair to downward pressure toward the six-week low of 0.6187, recorded on March 5.

On the upside, the AUD/USD pair may attempt to retest the three-month high of 0.6408, last seen on February 21. A breakout above this level would reinforce the bullish bias, potentially driving the pair toward the ascending channel’s upper boundary near 0.6470.

AUD/USD: Daily Chart

China’s January-February Retail Sales increased by 4% year-over-year (YoY) vs. 4% expected and 3.7% in December, the latest data released by the National Bureau of Statistics (NBS) showed Monday.

Chinese Industrial Production rose 5.9% YoY in the same period, compared to the 5.3% forecast and the 6.2% booked previously.

Meanwhile, the Fixed Asset Investment came in at 4.1% year-to-date (YTD) YoY in January-February, beating the expected 3.6% figure. The December reading was 3.2%.

AUD/USD reaction to Chinese data

The mixed Chinese data dump fails to deter the Australian Dollar, with AUD/USD holding higher ground near 0.6335. The pair is up 0.16% on the day, as of writing.

On Monday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1688 as compared to Friday's fix of 7.1738 and 7.2199 Reuters estimate.

The Houthis announced on Sunday that they launched an attack comprising 18 ballistic and cruise missiles as well as drones, targeting the USS Harry S Truman aircraft carrier and its accompanying warships in the northern Red Sea.

Houthi military spokesman Brigadier General Yahya Saree stated that the attack was in reaction to more than 47 US airstrikes authorized by US President Donald Trump against rebel-controlled areas in Yemen, including the capital Sanaa and the province of Saada, which borders Saudi Arabia.

The US defense secretary said on Sunday that the United States will continue attacking Yemen's Houthis until they stop attacks on shipping as the Iran-aligned group threatened to escalate in response to deadly US strikes the day before. 

Market reaction 

At the time of writing, the Gold price (XAU/USD) is trading 0.14% higher on the day to trade at $2,988.    

• EUR/USD may find support from improving risk sentiment amid a potential ceasefire discussion between Trump and Putin this week.
• The US Dollar remains steady as traders exercise caution before the upcoming Retail Sales data release.
• The Euro strengthened after Germany agreed on a debt overhaul and a significant increase in state spending.

EUR/USD remains steady around 1.0880 during Asian trading hours, with the US Dollar (USD) holding firm ahead of Monday’s Retail Sales data release. However, the Greenback faced headwinds after the University of Michigan (UoM) reported a decline in its preliminary Consumer Sentiment Index for March on Friday, falling to 57.9—the lowest since November 2022—from the previous reading of 64.7. This figure also came in below the consensus estimate of 63.1.

Markets widely anticipate that the Federal Reserve (Fed) will maintain its current policy stance when it concludes its two-day meeting on Wednesday. According to the CME FedWatch tool, traders have priced in nearly a 75% probability of a quarter-point rate cut by June.

The EUR/USD pair could gain support from improving risk sentiment amid reports of a potential ceasefire discussion between US President Donald Trump and Russian President Vladimir Putin this week. Trump’s envoy, Steve Witkoff, stated on Sunday that he expects the two leaders to speak, adding that Putin “accepts the philosophy” of Trump’s ceasefire and peace terms, according to The Guardian. Last week, the US and Ukraine proposed a 30-day ceasefire to Russia, with Putin expressing support for the initiative.

The Euro (EUR) strengthened following news that Germany had reached an agreement on a debt overhaul and a substantial increase in state spending. Friedrich Merz, the incoming chancellor, secured a deal with the Green and Social Democrat parties on Friday, ahead of a crucial parliamentary vote on Tuesday to reform borrowing rules. If the proposal garners a two-thirds majority, the increased spending plan could provide a significant boost to the EUR/USD pair.

Meanwhile, European Central Bank (ECB) Vice President Luis de Guindos expressed concerns on Sunday, stating that President Trump's policies are generating greater economic uncertainty than during the COVID-19 crisis, according to Bloomberg. Guindos noted that the new US administration appears less inclined toward multilateralism, which fosters cooperation across jurisdictions to address global challenges—a shift that he described as a major source of instability.

Additionally, ECB Governing Council member and Banque de France Governor François Villeroy de Galhau emphasized the need for the Euro to play a more prominent role on the global stage. In an interview with La Tribune Dimanche over the weekend, Galhau called for the creation of a "powerful savings and investment union" to attract international investors to the Euro.

• Gold price gains traction to around $2,985 in Monday’s early Asian session. 
• Economic uncertainty, Trump's tariff war and geopolitical risks underpin the Gold price. 
• The US envoy said he expected Trump to speak with Putin this week. 

Gold price (XAU/USD) remains strong near $2,985 after retracing from an all-time high of $3,005 during the early Asian session on Monday. The softer US Dollar (USD) and economic uncertainty over the impact of a global trade war provide some support to the precious metal. Traders await the US February Retail Sales data, which is due later on Monday. 

The escalating trade war between the US and many of its major trading partners has rattled financial markets and prompted fears about the impact on economies across the world. On Thursday, US President Donald Trump threatened to impose a 200% tariff on wine, cognac and other alcohol imports from Europe. 

This measure came in response to the EU plan to impose tariffs on American whiskey and other products in April, which itself is a reaction to Trump's 25% duties on steel and aluminum imports that took effect on Wednesday. 

Additionally, the softer Greenback after the weaker-than-expected US economic data contributes to the Gold’s upside. The preliminary reading of the University of Michigan (UoM) Consumer Sentiment Index showed that the index reached its lowest since November 2022, falling to 57.9 from 64.7 in the previous reading. This reading came in below the market consensus of 63.1.

The Houthis stated on Sunday that they launched an attack on the USS Harry S Truman aircraft carrier and its supporting vessels in the northern Red Sea, using 18 ballistic and cruise missiles as well as drones. "In a backdrop of geopolitical uncertainty and ongoing tariff changes, appetite for gold remains strong," said Suki Cooper, a precious metals analyst at Standard Chartered.

However, any positive developments or easing fears of Russia and Ukraine conflicts might drag the Gold price lower. Last week, the United States and Ukraine decided to propose a 30-day ceasefire to Russia. Trump’s envoy Steve Witkoff said on Sunday that he expected Trump to speak with Russian President Vladimir Putin this week, saying that Putin “accepts the philosophy” of Trump’s ceasefire and peace terms.  

• Gold price gains traction to around $2,985 in Monday’s early Asian session. 
• Economic uncertainty, Trump's tariff war and geopolitical risks underpin the Gold price. 
• The US envoy said he expected Trump to speak with Putin this week. 

Gold price (XAU/USD) remains strong near $2,985 after retracing from an all-time high of $3,005 during the early Asian session on Monday. The softer US Dollar (USD) and economic uncertainty over the impact of a global trade war provide some support to the precious metal. Traders await the US February Retail Sales data, which is due later on Monday. 

The escalating trade war between the US and many of its major trading partners has rattled financial markets and prompted fears about the impact on economies across the world. On Thursday, US President Donald Trump threatened to impose a 200% tariff on wine, cognac and other alcohol imports from Europe. 

This measure came in response to the EU plan to impose tariffs on American whiskey and other products in April, which itself is a reaction to Trump's 25% duties on steel and aluminum imports that took effect on Wednesday. 

Additionally, the softer Greenback after the weaker-than-expected US economic data contributes to the Gold’s upside. The preliminary reading of the University of Michigan (UoM) Consumer Sentiment Index showed that the index reached its lowest since November 2022, falling to 57.9 from 64.7 in the previous reading. This reading came in below the market consensus of 63.1.

The Houthis stated on Sunday that they launched an attack on the USS Harry S Truman aircraft carrier and its supporting vessels in the northern Red Sea, using 18 ballistic and cruise missiles as well as drones. "In a backdrop of geopolitical uncertainty and ongoing tariff changes, appetite for gold remains strong," said Suki Cooper, a precious metals analyst at Standard Chartered.

However, any positive developments or easing fears of Russia and Ukraine conflicts might drag the Gold price lower. Last week, the United States and Ukraine decided to propose a 30-day ceasefire to Russia. Trump’s envoy Steve Witkoff said on Sunday that he expected Trump to speak with Russian President Vladimir Putin this week, saying that Putin “accepts the philosophy” of Trump’s ceasefire and peace terms.  

• GBP/USD struggles to gain any meaningful traction on Monday amid mixed fundamental cues.
• A bearish USD lends support to the pair, though Friday’s dismal UK GDP print caps the upside.
• Traders also seem reluctant to place aggressive bets ahead of the Fed/BoE meetings this week.

The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow trading band, around the 1.2930 region during the Asian session. The fundamental backdrop, however, warrants some caution before positioning for any meaningful corrective pullback for spot prices from a four-month peak, around the 1.2990 area touched last Wednesday.

The US Dollar (USD) languishes near a multi-month low amid worries that US President Donald Trump's tariffs and retaliatory measures from other countries could hurt the US economy. Adding to this, softer then expected US inflation and signs of cooling US labor market might force the Federal Reserve (Fed) to cut interest rates several times this year. This, in turn, keeps the USD bulls on the defensive and acts as a tailwind for the GBP/USD pair. 

The bets for further policy easing by the Fed were reaffirmed by the University of Michigan Surveys released on Friday, which showed that Consumer Sentiment Index plunged to a nearly 2-1/2-year low in March. Moreover, inflation expectations soared amid worries that Trump's aggressive economic policies would boost prices. Apart from this, a generally positive tone around the Asian equity markets is seen undermining the safe-haven Greenback. 

The British Pound (GBP), on the other hand, struggles to lure buyers in the wake of Friday's dismal domestic data, which showed that the UK economy unexpectedly contracted by 0.1% in January. Investors, however, seem convinced that the Bank of England (BoE) will cut rates more slowly than other central banks, including the Fed. This, in turn, favors the GBP bulls and suggests that the path of least resistance for the GBP/USD pair is to the upside. 

Traders now look to the US economic docket, featuring the release of monthly Retail Sales and the Empire State Manufacturing Index, for some impetus later during the North American session. The focus, however, will remain glued to the key central bank event risks – the outcome of the highly-anticipated two-day FOMC monetary policy meeting on Wednesday, which will be followed by the BoE policy meeting on Thursday.

• GBP/USD struggles to gain any meaningful traction on Monday amid mixed fundamental cues.
• A bearish USD lends support to the pair, though Friday’s dismal UK GDP print caps the upside.
• Traders also seem reluctant to place aggressive bets ahead of the Fed/BoE meetings this week.

The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow trading band, around the 1.2930 region during the Asian session. The fundamental backdrop, however, warrants some caution before positioning for any meaningful corrective pullback for spot prices from a four-month peak, around the 1.2990 area touched last Wednesday.

The US Dollar (USD) languishes near a multi-month low amid worries that US President Donald Trump's tariffs and retaliatory measures from other countries could hurt the US economy. Adding to this, softer then expected US inflation and signs of cooling US labor market might force the Federal Reserve (Fed) to cut interest rates several times this year. This, in turn, keeps the USD bulls on the defensive and acts as a tailwind for the GBP/USD pair. 

The bets for further policy easing by the Fed were reaffirmed by the University of Michigan Surveys released on Friday, which showed that Consumer Sentiment Index plunged to a nearly 2-1/2-year low in March. Moreover, inflation expectations soared amid worries that Trump's aggressive economic policies would boost prices. Apart from this, a generally positive tone around the Asian equity markets is seen undermining the safe-haven Greenback. 

The British Pound (GBP), on the other hand, struggles to lure buyers in the wake of Friday's dismal domestic data, which showed that the UK economy unexpectedly contracted by 0.1% in January. Investors, however, seem convinced that the Bank of England (BoE) will cut rates more slowly than other central banks, including the Fed. This, in turn, favors the GBP bulls and suggests that the path of least resistance for the GBP/USD pair is to the upside. 

Traders now look to the US economic docket, featuring the release of monthly Retail Sales and the Empire State Manufacturing Index, for some impetus later during the North American session. The focus, however, will remain glued to the key central bank event risks – the outcome of the highly-anticipated two-day FOMC monetary policy meeting on Wednesday, which will be followed by the BoE policy meeting on Thursday.

European Central Bank Governing Council member and Governor of the Banque de France, Francois Villeroy de Galhau, said over the weekend that the Euro should take on a more important role internationally.  

Key quotes

Market reaction

At the time of press, the EUR/USD pair was down 0.01% on the day at 1.0876. 

European Central Bank Governing Council member and Governor of the Banque de France, Francois Villeroy de Galhau, said over the weekend that the Euro should take on a more important role internationally.  

Key quotes

Market reaction

At the time of press, the EUR/USD pair was down 0.01% on the day at 1.0876. 

Donald Trump’s envoy Steve Witkoff said on Sunday that he expected the US President to speak with Russian President Vladimir Putin this week, saying that Putin “accepts the philosophy” of Trump’s ceasefire and peace terms, per the Guardian. 

Last week, the United States and Ukraine decided to propose a 30-day ceasefire to Russia. While Putin said that he supports a cease-fire, he also laid a list of tough conditions for achieving peace. 

Market reaction 

At the time of writing, the Gold price (XAU/USD) is trading 0.16% higher on the day to trade at $2,989.