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  • Dow Jones backslides on trade war rhetoric

    Dow Jones backslides on trade war rhetoric


    • The Dow Jones shed 400 points on Thursday, falling 1.45%.
    • US PPI inflation hit a soft patch, further easing fears of an inflation reignition.
    • Despite easing price pressures, equities still took a hit as Trump threatens more tariffs.

    The Dow Jones Industrial Average (DJIA) fell some 400 points on Thursday, declining around one full percent after United States (US) President Donald Trump and his administration ramped up their trade war rhetoric. President Trump pivoted to threatening new tariffs on targeted goods from the European Union after his tactic of trying to strong-arm Canada into making trade concessions went nowhere earlier this week.

    The US Producer Price Index (PPI) cooled faster than expected in February, with core PPI inflation easing to 3.4% YoY versus the expected print of 3.5% and January’s 3.6%. Headline PPI inflation also chilled, falling to 3.2% on an annualized basis compared to the forecast of 3.3%, however January’s headline PPI print was revised higher to 3.7% as revisions continue to be a thorn in the side of preliminary data watchers.

    Despite a general easing in this week’s batch of inflation data, the odds of another rate cut from the Federal Reserve (Fed) next week look slim. Inflation metrics are still running well above the Fed’s 2% annual target, and according to the CME’s FedWatch Tool, rate markets are pricing in functionally 100% odds of the Fed holding rates steady after its rate call meeting next week. Rate traders expect the Fed’s next move on rates to be in June, if not later.

    US President Donald Trump hit the ground running on Thursday, vowing to impose a stiff 200% tariff on European wines if the EU doesn’t back off from its 50% tariff on US-produced whisky, which was imposed as a retaliatory measure against the US’s global 25% steel and aluminum tariff that went into effect this week. President Trump attempted to strong-arm his Canadian neighbors into not retaliating against his steel import fees. 

    However, those measures largely fizzled and resulted in no concessions from Canada, and now the Trump administration is shifting its tit-for-tat tariff strategy on Europe. Donald Trump also returned to musing about ‘taking’ Greenland from Denmark as the US president revisits talking points from his campaign trail.

    Dow Jones news

    A large majority of the stocks listed on the Dow Jones fell back on Thursday, with two-thirds of the index’s securities slipping into the red. Verizon (VZ) rebounded 2.5% to above $43 per share as the telecoms giant recovers from a rout earlier this week. Salesforce (CRM) and Home Depot (HD) both fell over 4%, falling to $271 per share and below $350 per share, respectively. Tech stocks and building suppliers are growing increasingly uneasy in the face of the Trump administration’s trade policies.

    Dow Jones price forecast

    Losses are beginning to accumulate on the Dow Jones Industrial Average chart, dragging the major equity index into correction territory with the Dow Jones down 2,000 points on the week. The DJIA has shed nearly 10% from last November’s record highs just north of 45,000, and price action is back below the 41,000 handle for the first time in 6 months.

    Dow Jones 4-hour chart

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

     



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  • Canadian Dollar loses ground for a third straight day as trade war heats up

    Canadian Dollar loses ground for a third straight day as trade war heats up


    • The Canadian Dollar shed 0.3% against the Greenback on Tuesday.
    • Bank of Canada (BoC) rate call looms large during the midweek session.
    • US President Trump’s trade war against Canada has hit a new gear.

    The Canadian Dollar roiled on Tuesday, falling roughly six-tenths of one percent against the Greenback at its lowest as markets weigh the latest evolution in US President Donald Trump’s self-styled trade war against Canada. The Canadian Dollar is still testing within familiar technical territory against the US Dollar, however, the Loonie is poised for further losses after shedding weight for three straight sessions against the USD, all on rising trade war fears.

    The Bank of Canada (BoC) is slated to deliver its latest rate call on Wednesday, however markets are getting thrown for a loop on whether the BoC will be able to deliver its expected quarter-point rate trim as trade war rhetoric from team Trump ramps up. Donald Trump took to his favorite social media app to declare that he’s instructed his Secretary of Commerce to double tariffs on all steel and aluminum imported from Canada to 50%, also to begin on Wednesday.

    Daily digest market movers: Canadian Dollar withers again on new tariff threats

    • US President Donald Trump vowed via social media to impose an additional tariff on Canadian steel and aluminum, bringing the total to 50% and declaring the tariff to go into effect on Wednesday.
    • Ontario Prime Minister Doug Ford was quick to retaliate against the US with a flat export tax of 25% on all electricity sent to the US, which sent Donald Trump into a further tailspin on social media.
    • Ontario PM Ford followed up with an additional warning that Ontario could shut up energy exports to the US entirely, which would see 1.5M Americans without power.
    • White House officials followed up with an announcement that the “paperwork” on additional steel and aluminum tariffs targeted at Canada hasn’t been “signed” in an effort to cross the moat that President Trump continues to dig for the US.
    • President Trump reiterated his misunderstanding of Canadian cap-trade tariffs on US dairy products that are baked into the USMCA trade agreement, which Donald Trump himself spearheaded during his first term in the White House.
    • The BoC is slated to cut interest rates by another quarter of a point to 2.75% on Wednesday, but rising tariff concerns could throw a wrench in the works.

    Canadian Dollar price forecast

    The Canadian Dollar whipsawed against the Greenback on Tuesday, falling 0.9% top-to-bottom at its absolute lowest as markets churn on geopolitical headlines. The Loonie has somewhat recovered its footing, but still remains down for a third straight session against the US Dollar. USD/CAD has risen around 2% in three straight trading days as the Loonie backslides against the Greenback.

    USD/CAD 4-hour chart

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

     



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  • US Dollar dives lower with German defense spending bill back on track

    US Dollar dives lower with German defense spending bill back on track


    • The US Dollar trades broadly in the red on Tuesday, devaluing further against most major peers.
    • The German Green coalition is said to be back on track for a defense spending bill. 
    • The US Dollar Index heads to the lower range of 103.00 and could break below it. 

    The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is eking out lows not seen since October 2024. The index trades above 103.50 at the time of writing on Tuesday. The Greenback faces headwinds on early European comments from the German green coalition, who said to be back on track for an agreement on a German defense spending bill. This pushes the US Dollar (USD) lower in favor of the Euro (EUR).

    On the economic data front, the US JOLTS Job Openings report for January will catch most of the attention. Traders are already spooked by recession fears, so a further decline in job openings could add to that conviction and see further downside momentum for the DXY. The US NFIB Business Optimism Index for February already released fell to 100.7, missing the 101 estimate and further down from the previous 102.8 reading. 

    Daily digest market movers: Some dots to connect

    • In the early European trading session, a headline was published that the German Green coalition leader said to be hopeful on a defense spending deal this week, Bloomberg reported. This news represents a 180-degree shift from the headline that triggered some US Dollar (USD) strength on Monday, where the Green Party was unwilling to support any defense spending deal. 
    • At 14:00, the US JOLTS Job Openings report for January will be published. Expectations are for an uptick to 7.75 million openings against the 7.6 million from December.
    • Equities are trying to brush off the doom and gloom from Monday. European equities are higher while US futures are in positive territory. 
    • The CME Fedwatch Tool projects a 95.0% chance for no interest rate changes in the upcoming Fed meeting on March 19. However, the chances of a rate cut at the May 7 meeting increase to 47.8% and to 89.9% at June’s meeting.
    • The US 10-year yield trades around 4.20%, off its near five-month low of 4.10% printed on Tuesday last week.

    US Dollar Index Technical Analysis: Not a one-day event

    The US Dollar Index (DXY) faces more selling pressure on Tuesday as recession fears are not going away. Traders remain concerned about tariffs’ impact and uncertainty on the US economy. Seeing the performance in US equities year-to-date, there is not much reason to be happy and no reason to support a stronger Dollar in the current narrative. 

    There is an upside risk at 104.00 for a firm rejection. 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 105.03. 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

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

     



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  • Australian Dollar recovers recent losses as US Dollar struggles amid growth concerns

    Australian Dollar recovers recent losses as US Dollar struggles amid growth concerns


    • The Australian Dollar appreciates as the US Dollar faces challenges as concerns over tariff uncertainties deepen.
    • Westpac Consumer Confidence climbed 4% to 95.9 in March, up from 92.2 in February, reaching its highest level in three years.
    • President Trump described the economy as being in a “transition period,” signaling a potential slowdown.

    The Australian Dollar (AUD) appreciates against the US Dollar (USD) for the fourth consecutive session on Tuesday. However, the AUD/USD pair struggled, during early hours, despite a stronger Westpac Consumer Confidence reading—rising 4% to 95.9 in March from 92.2 in February, marking its highest level in three years. The uptick in sentiment was driven by the Reserve Bank of Australia’s (RBA) interest rate cut in February and easing cost-of-living pressures.

    Australia’s 10-year government bond yield declined to around 4.39% as escalating global trade tensions dampened investor risk appetite. China’s retaliatory tariffs on select United States (US) agricultural products took effect on Monday, following Washington’s recent tariff hike from 10% to 20% on Chinese imports. Given China’s status as Australia’s largest trading partner, these developments have weighed on market sentiment.

    Traders remain focused on the RBA’s policy outlook, especially after last week’s strong economic data tempered expectations of further rate cuts. Economic growth exceeded forecasts, marking its first acceleration in over a year. Additionally, the latest RBA Meeting Minutes signaled a cautious approach to monetary policy, clarifying that February’s rate cut does not imply a commitment to ongoing easing.

    With the Federal Reserve entering its blackout period ahead of the March 19 meeting, central bank commentary will be limited this week. Investors are now looking ahead to February’s Consumer Price Index (CPI) release on Wednesday for further insights into inflation trends.

    Australian Dollar faces challenges amid escalating global trade tensions

    • The US Dollar Index (DXY), which tracks the US Dollar against six major currencies, remains subdued for the sixth consecutive day and is trading around 103.80 at the time of writing. Concerns over tariff policy uncertainty potentially pushing the US economy into recession have weighed on the Greenback.
    • Weaker-than-expected US job data for February reinforced expectations that the Federal Reserve (Fed) will proceed with multiple rate cuts this year. According to LSEG data, traders are now pricing in a total of 75 basis points (bps) in rate cuts, with a June cut fully anticipated.
    • President Trump characterized the economy as being in a “transition period,” hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.
    • The US Bureau of Labor Statistics (BLS) showed on Friday that Nonfarm Payrolls (NFP) increased by 151,000 in February, falling short of the expected 160,000. January’s job growth was also revised downward to 125,000 from the previously reported 143,000.
    • Last week, Fed Chair Jerome Powell reassured markets that the central bank sees no immediate need to adjust monetary policy despite rising uncertainties. San Francisco Fed President Mary Daly echoed this sentiment, noting that increasing business uncertainty could dampen demand but does not justify an interest rate change.
    • US Commerce Secretary Howard Lutnick stated on Sunday that the 25% tariffs, imposed by President Donald Trump in February, on steel and aluminum imports, set to take effect on Wednesday, are unlikely to be postponed, according to Bloomberg. While US steelmakers have urged Trump to maintain the tariffs, businesses reliant on these materials may face increased costs.
    • President Trump stated on Sunday that he anticipates a positive outcome from the US discussions with Ukrainian officials in Saudi Arabia. Trump also mentioned that his administration has considered lifting an intelligence pause on Ukraine, is evaluating various aspects of tariffs on Russia, and is not worried about military exercises involving Russia, China, and Iran, according to Reuters.
    • RBA Deputy Governor Andrew Hauser highlighted that global trade uncertainty is at a 50-year high. Hauser warned that uncertainty stemming from US President Donald Trump’s tariffs could prompt businesses and households to delay planning and investment, potentially weighing on economic growth.
    • China announced on Saturday that it will impose a 100% tariff on Canadian rapeseed oil, oil cakes, and peas, along with a 25% levy on aquatic products and pork from Canada. The move comes as retaliation against tariffs introduced by Canada in October, escalating trade tensions. This marks a new front in a broader trade conflict driven by US President Donald Trump’s tariff policies. The tariffs are set to take effect on March 20.
    • China’s Consumer Price Index fell by 0.7% year-over-year in February, exceeding market expectations of a 0.5% decline and reversing the 0.5% increase recorded in the previous month. This marks the first instance of consumer deflation since January 2024, driven by weakening seasonal demand after the Spring Festival in late January. On a monthly basis, CPI inflation stood at -0.2% in February, down from January’s 0.7% and softer than the expected -0.1%.

    Technical Analysis: Australian Dollar falls to near 0.6250 as bearish momentum strengthens

    The AUD/USD pair is trading near 0.6260 on Tuesday, with technical analysis of the daily chart showing the pair slipping below the nine-day Exponential Moving Average (EMA), signaling weakening short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) has fallen below 50, indicating a shift toward a bearish bias.

    On the downside, the AUD/USD pair could navigate the region around the five-week low of 0.6187, recorded on March 5.

    The nine-day EMA at 0.6288 serves as the immediate resistance for the AUD/USD pair, followed by the 50-day EMA at 0.6305. A break above this level could strengthen short-term momentum, potentially pushing the pair toward the three-month high of 0.6408, last reached on February 21.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.19% -0.10% -0.18% -0.13% -0.04% 0.05% -0.28%
    EUR 0.19%   0.10% 0.02% 0.07% 0.16% 0.24% -0.08%
    GBP 0.10% -0.10%   -0.08% -0.04% 0.06% 0.15% -0.16%
    JPY 0.18% -0.02% 0.08%   0.05% 0.15% 0.22% -0.08%
    CAD 0.13% -0.07% 0.04% -0.05%   0.10% 0.18% -0.13%
    AUD 0.04% -0.16% -0.06% -0.15% -0.10%   0.09% -0.22%
    NZD -0.05% -0.24% -0.15% -0.22% -0.18% -0.09%   -0.31%
    CHF 0.28% 0.08% 0.16% 0.08% 0.13% 0.22% 0.31%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

     



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  • US Dollar sees some gains on a quiet start of the week

    US Dollar sees some gains on a quiet start of the week


    • DXY stalls around 103.95 as market sentiment remains fragile.
    • Traders eye Wednesday’s US CPI data for fresh market direction.
    • Nasdaq slides 3.3%, dragging broader equities lower.

    The US Dollar (USD) remains under pressure on Monday, with DXY hovering around 103.95, struggling to find traction after last week’s steep decline. Federal Reserve (Fed) Chair Jerome Powell’s latest remarks on Friday reassured markets that the central bank sees no urgent need to adjust policy at the moment, though economic uncertainties are growing. Meanwhile, the Nasdaq is facing heavy market losses, down 3.3%, as investors remain cautious ahead of key United States (US) inflation data due midweek.

    Daily digest market movers: Fed in focus as CPI looms

    • Market participants are bracing for the release of February’s Consumer Price Index (CPI) on Wednesday, expected to provide key insights into inflation trends.
    • The Federal Reserve enters its blackout period ahead of the March 19 meeting, limiting central bank commentary for the week.
    • Fed Chair Jerome Powell reiterated on Friday that the Fed remains patient and does not see an urgent need to act, preferring to wait for additional economic data before making any policy changes.
    • US equities face a sharp correction, with the Nasdaq leading losses, down 3.3%.
    • CME FedWatch Tool indicates a majority expectation for rates to remain at current levels in May, while June rate cut expectations have risen significantly.
    • Ahead of the blackout media period, the Fed’s sentiment index on the daily chart has fallen towards neutral ground, which could also explain the USD’s decline.

    DXY technical outlook: Testing support near 103.50

    The US Dollar Index (DXY) stabilizes below 104.00, consolidating after last week’s steep drop. The 20-day and 100-day Simple Moving Averages (SMA) confirmed a bearish crossover near 107.00, reinforcing the negative trend. The Relative Strength Index (RSI) remains near oversold territory, signaling potential for a short-term rebound. Meanwhile, the Moving Average Convergence Divergence (MACD) remains bearish, suggesting further downside risk unless buyers step in near support levels. If DXY fails to reclaim 104.50, the next support is seen near 103.30, which could determine whether a deeper decline unfolds.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

     



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  • Dow Jones backslides amid wavering sentiment

    Dow Jones backslides amid wavering sentiment


    • The Dow Jones shed around 575 points on Thursday, as trade war fears resume.
    • The more the Trump administration tries to soothe tariff fears, the worse things get.
    • Market sentiment is still churning despite announced tariff delays and upbeat jobs data.

    The Dow Jones Industrial Average turned tail and ran on Thursday, in tandem with the rest of the US equity indexes. United States (US) President Donald Trump continues to waffle on his own trade war rhetoric, exploring tariff exemptions and extensions on a sector-by-sector basis. However, the lack of clarity and consistency in policy that tends to get announced off-the-cuff via social media posting is beginning to weigh on market sentiment.

    The Trump administration is continuing to pivot on its own tariff threats, granting a 30-day reprieve for the US automotive industry, which remains heavily reliant on foreign trade to produce its vehicles. Other industries, sectors, and businesses are up for making a case for why they should receive an exemption, at least for a little while, and the ongoing uncertainty around President Trump’s trade war rhetoric is sinking investor risk appetite.

    US Nonfarm Payrolls (NFP) net job gains numbers for February are due on Friday, and Thursday’s Challenger Job Cuts number is providing little reason for traders to hope for a decent NFP print this week. Challenger firings reached their highest level since August of 2020 in February, climbing to 172K net terminations in key industries, strongly implying that a general slowdown is gathering speed.

    Dow Jones news

    Nearly the entire Dow Jones equity board is falling back on Thursday, with all but three listed securities trading into the red. Verizon Communications still managed to find some gains, climbing 1.2% to cross above $43 per share. Nvidia (NVDA) fell back once again, falling nearly 5% and dipping below $112 per share as the AI trade continues to fizzle out.

    Dow Jones price forecast

    Thursday is turning into a lunchbag letdown for bullish hopefuls, shredding the midweek rebound that has vanished as quickly as it disappeared. The Dow Jones is trading back into the 42,500 handle, with a near-term technical floor priced in at the 42,400 level.

    The Dow Jones is poised to make contact with the 200-day Exponential Moving Average (EMA) near the 42,000 key figure, but only if selling pressure is able to push bids down another 500 points, a move that would likely require a shift in fundamentals… or a bad employment data print.

    Dow Jones daily chart

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

     



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  • The ADP Employment Report rose by 77K in February

    The ADP Employment Report rose by 77K in February


    In February, private sector employment in the US grew by just 77K, coming in short of initial estimates of 140K, according to the latest Automatic Data Processing (ADP) report. In addition, the reading was lower than January’s 186K (revised from 183K).

    Following the release, Nela Richardson, ADP’s Chief Economist, said that policy uncertainty and a slowdown in consumer spending might have led to layoffs or reduced hiring during the previous month. She noted that ADP’s data, along with other recent indicators, pointed to a cautious approach among employers as they evaluated the economic outlook.

    Market reaction

    The Greenback extends its decline and challenges the 105.00 support for the first time since early November when tracked by the US Dollar Index (DXY).

    US Dollar PRICE Today

    The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.88% -0.27% 0.10% -0.53% -0.51% -0.59% -0.01%
    EUR 0.88%   0.62% 0.99% 0.35% 0.37% 0.29% 0.89%
    GBP 0.27% -0.62%   0.34% -0.26% -0.25% -0.33% 0.26%
    JPY -0.10% -0.99% -0.34%   -0.64% -0.64% -0.72% -0.12%
    CAD 0.53% -0.35% 0.26% 0.64%   0.02% -0.06% 0.53%
    AUD 0.51% -0.37% 0.25% 0.64% -0.02%   -0.07% 0.52%
    NZD 0.59% -0.29% 0.33% 0.72% 0.06% 0.07%   0.60%
    CHF 0.00% -0.89% -0.26% 0.12% -0.53% -0.52% -0.60%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

    This section below was published as a preview of the US ADP Employment Change data at 08:30 GMT.

    • The ADP Employment Change, and the US labour market, take centre stage this week.
    • The US private sector is seen adding 140K new jobs in February. 
    • The US Dollar Index continues to trade in the lower end of the range.

    The US labor market is set to take center stage this week as fresh concerns mount that the economy may be losing its momentum — a sentiment echoed by recent slower growth and worrisome fundamental data.

    In the spotlight, the ADP Research Institute is poised to release its February Employment Change report on Wednesday, offering a snapshot of private-sector job creation.

    Typically coming out two days before the official Nonfarm Payrolls (NFP) report, the ADP survey is often seen as an early indicator of trends expected in the Bureau of Labor Statistics (BLS) jobs report — even if the two don’t always tell the same story.

    The economic equation: Job growth and Fed policy in focus

    Employment is critical as it forms one of the two legs of the Federal Reserve’s (Fed) dual mandate. The US central bank is tasked with maintaining price stability while pursuing maximum employment. As inflationary pressures remain stubborn, the focus appears to have temporarily shifted to the performance of the US labour market following the Fed’s hawkish stance at its January 28–29 meeting.

    In the meantime, investors continue to closely monitor the White House’s trade policies and their consequences, particularly after US tariffs on Canadian and Mexican imports took effect on March 4. Fears that these levies could fan the flames of a resurgence in inflationary pressure have driven both the Fed’s prudent approach and the cautious remarks from many of its policymakers.

    So far, and in light of the recent set of weaker-than-expected results that have challenged the notion of US “exceptionalism”, market participants now expect the Fed to reduce interest rates by 50 basis points this year.

    Amid the ongoing tariff turmoil, the apparent slowing momentum of the US economy, and persistent consumer price pressures, the ADP report — and especially Friday’s Nonfarm Payrolls report — has gained renewed relevance and could help shape the Fed’s next move.

    When will the ADP Report be released, and how could it affect the US Dollar Index?

    The ADP Employment Change report for February is set to drop on Wednesday at 13:15 GMT with forecasts pointing to an addition of 140K new jobs following January’s gain of 183K. In anticipation, the US Dollar Index (DXY) remains securely on the defensive, putting the key support at 106.00 to the test amid rising jitters over the US economy.

    If the ADP report delivers robust numbers, it could momentarily cool the mounting concerns over the US economic slowdown. However, if the results fall short of expectations, it might reinforce worries that the economy is losing momentum—potentially prompting the Fed to reconsider an earlier restart of its easing cycle.

    According to Pablo Piovano, Senior Analyst at FXStreet, “If the recovery gains traction, the DXY could revisit the weekly peak of 107.66 (February 28), a region that appears reinforced by the proximity of the transitory 55-day SMA around 107.90, ahead of the February high of 109.88 set on February 3, and the YTD peak of 110.17 from January 13. Surpassing that level might pave the way toward the next resistance at the 2022 high of 114.77 recorded on September 28.

    “On the flip side, if sellers manage to seize control, the index might first find support at the 2025 bottom of 105.89 reached on March 4, prior to the December 2024 bottom of 105.42, and eventually at the critical 200-day SMA in the 105.00 zone. Staying above that key threshold is essential for sustaining bullish momentum,” Piovano concludes.

    GDP FAQs

    A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.

    A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.

    When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

     



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  • Gold soars as investors flock to safety on trade and geopolitical uncertainty

    Gold soars as investors flock to safety on trade and geopolitical uncertainty


    • XAU/USD climbs to $2,888 as markets brace for tariffs, weaker US growth
    • Gold snaps a two-day losing streak as risk-off sentiment drives safe-haven flows.
    • Trump’s tariff threats, clash with Zelenskyy fuel market uncertainty.
    • Atlanta Fed GDP Now forecast plunges to -2.8%, boosts Gold’s appeal.

    Gold price is rallying over 1% on Monday, snapping two days of losses as the Greenback gets battered due to safe-haven demand and falling United States (US) Treasury bond yields. Geopolitical tensions and tariff threats by US President Donald Trump increased demand for the safety appeal of Bullion. XAU/USD trades at $2,888 at the time of writing.

    Risk appetite deteriorated following the clash between US President Donald Trump and Ukrainian President Volodymir Zelenskyy last Friday. In the meantime, tariffs imposed on Mexico, Canada and China are expected to kick in on Tuesday.

    Data-wise, business activity in the manufacturing sector in February was mixed, with S&P Global improving, while the ISM dipped but continued to expand.

    In the meantime, the last round of US economic data pushed the Atlanta GDP Now Q1 2025 forecast model further deep into negative territory from -1.6% on February 28 to -2.8% as of writing.

    Source: GDPNow

    Therefore, traders seeking safety bought Bullion pushing prices on the way towards $2,900. The US 10-year Treasury note falls two basis points (bps) down to 4.176% levels last seen in December 2024.

    Alongside the data, St. Louis Fed President Alberto Musalem said the economic outlook is for continued solid economic growth, but recent data pose some downside risks.

    Daily digest market movers: Gold price surges amid pessimistic US economic outlook

    • US real yields, as measured by the yield in the US 10-year Treasury Inflation-Protected Securities (TIPS), tumble almost three bps to 1.808%.
    • The US ISM Manufacturing PMI for February held steady at 50.3, slightly down from 50.9 and below the 50.5 forecast, indicating a mild slowdown in business activity.
    • S&P Global Manufacturing PMI showed improvement, rising to 52.7 from 51.2, surpassing expectations of 51.6, signaling continued expansion in the sector.
    • Money markets had priced in that the Federal Reserve (Fed) would ease policy by 71 basis points (bps), up from 58 bps last week, revealed data from Prime Market Terminal.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold price advances towards $2,900

    Gold price uptrend resumed after two days of losses that drove XAU/USD below the $2,900 figure. Nevertheless, buyers stepped in near the $2,830 mark, lifting spot prices above $2,850, which exacerbated the rally toward $2,893. If buyers achieve a daily close above $2,900, bullion could be poised to challenge the year-to-date (YTD) peak at $2,954.

    Otherwise, on further weakness, XAU/USD could aim toward the February 14 low of $2,877, followed by the February 12 swing low of $2,864. However, the broader uptrend remains intact unless XAU/USD drops below $2,800.

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

     



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  • US Dollar tumbles as Ukraine peace talks gain traction

    US Dollar tumbles as Ukraine peace talks gain traction


    • DXY erases Friday’s gains, slipping as European leaders back Ukraine peace deal guarantees.
    • US Manufacturing PMI beats estimates, while ISM Manufacturing PMI misses expectations.
    • Bond yields edge lower, reinforcing expectations of Fed rate cuts later in 2025.
    • Technical indicators suggest further downside as key moving averages converge near 107.00.

    The US Dollar Index (DXY), which tracks the performance of the Greenback against a basket of six major currencies, is diving sharply on Monday as optimism surrounding a potential Ukraine peace deal weighs on safe-haven demand. European leaders have signaled their willingness to back security guarantees for Ukraine, boosting risk sentiment across global markets.

    Meanwhile, United States (US) economic data provided mixed signals. The ISM Manufacturing PMI missed forecasts, while the S&P Global Manufacturing PMI came in stronger than expected. As a result, DXY slides back from last week’s highs, undoing Friday’s advance. Regarding tariffs, Trump was on the wires on Monday during the American session and reiterated its plan to double Chinese tariffs from 10% to 20%, but had little impact on the USD.

    Daily digest market movers: US Dollar plunges as geopolitical optimism lifts sentiment, US data comes mixed

    • DXY tumbles as investors reduce safe-haven exposure amid Ukraine peace deal optimism. This came after several European leaders cooled down the jitters after Friday’s heated conversations between the American and Ukrainian presidents.
    • On the data front, S&P Global’s final Manufacturing PMI for February exceeded estimates at 52.7, strengthening from the preliminary reading.
    • ISM Manufacturing PMI came in at 50.3, slightly below the 50.5 forecast and down from January’s 50.9.
    • The ISM Prices Paid subindex spiked to 62.4, surpassing estimates and accelerating from January’s 54.9.
    • New Orders component dropped to 48.6, reflecting a significant decline from 55.1 in January.
    • As a reaction, Wall Street trades mixed, with major US indices posting marginal gains and losses. US Treasury yields drift lower, extending the downtrend from last week’s highs.
    • The CME FedWatch Tool indicates an increasing probability of a Fed rate cut in June, though some odds still favor steady rates.

    DXY technical outlook: Bearish crossover looms as downside momentum builds

    The US Dollar Index (DXY) turns lower, slipping below the 20-day and 100-day Simple Moving Averages (SMA), which are nearing a bearish crossover around the 107.00 level. Momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are reinforcing the negative outlook. Key support levels emerge at 106.00 and 105.50, while 107.00 remains the first resistance level should the index attempt a rebound. However, with fundamental and technical factors aligning to the downside, further weakness is likely in the short term.

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

     



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  • Pound Sterling gains as Ukraine peace plan increases investors’ risk appetite

    Pound Sterling gains as Ukraine peace plan increases investors’ risk appetite


    • The Pound Sterling rises to near 1.2650 against the US Dollar due to positive developments in the Russia-Ukraine peace truce.
    • Fears of US President Trump’s tariffs on Canada, Mexico, and China loom large.
    • The BoE is expected to follow a careful and gradual policy-easing approach.

    The Pound Sterling (GBP) trades higher against its major peers, except the Euro, at the start of the week due to a potential Russia-Ukraine peace truce. Over the weekend, United Kingdom (UK) Prime Minister Keir Starmer said European leaders agreed to present a peace plan to Washington. The meeting between European leaders and Starmer was also attended by Ukrainian President Volodymyr Zelenskyy, potentially a big positive step towards ending the three-year-long war in Ukraine. Technically, signs of easing geopolitical tensions improve demand for risky assets.

    Additionally, firm expectations that the Bank of England (BoE) will follow a moderate policy-easing cycle and a likely healthy trade deal between the US and the UK have kept the British currency on the frontfoot. On Friday, BoE Deputy Governor Dave Ramsden said that the central bank should keep a “careful and gradual” approach to the monetary policy expansion amid uncertainty over the labor market and global trade.

    Ramsden warned that inflationary pressures are still elevated due to persistent wage growth. “I no longer think that risks to hitting the 2% inflation target sustainably in the medium term are to the downside,” Ramsden said. Meanwhile, trades have fully priced in two interest rate cuts this year.

    The meeting between US President Trump and UK Prime Minister Starmer on Thursday didn’t end with a trade deal, but Trump was confident that an agreement could be made “pretty quickly” where tariffs “wouldn’t be necessary”.

    Daily digest market movers: Pound Sterling recovers against US Dollar

    • The Pound Sterling gains ground against the US Dollar (USD) after a two-day correction and rebounds to near 1.2650 in European trading hours on Monday. The GBP/USD pair bounces back as the risk premium of the US Dollar diminishes on optimism over a peace truce between Russia and Ukraine. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls to near 107.25 from an over two-week high of 107.65 posted on Friday.
    • However, investors should be cautious about betting big against the US Dollar due to looming tariff fears. United States (US) President Donald Trump is poised to slap tariffs on Canada, Mexico, and China for failing to restrict the flow of fentanyl into the US.
    • US Commerce Secretary Howard Lutnick confirmed over the weekend that the President’s plans of imposing tariffs on Canada and Mexico on Tuesday are on. However, his comments indicated that there is room for negotiation over the degree of tariffs. 
    • US President Trump threatened to impose a 25% levy on Canada and Mexico and an additional 10% on China. Trump also slapped 10% tariffs on China in the first week of February.
    • This week, investors will pay close attention to a slew of US economic data, notably on the Nonfarm Payrolls (NFP) data for February, which will be released on Friday. The labor market data will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. The Fed is expected to keep interest rates steady in the March and May policy meetings, and there is a 77% chance that it will cut them in June, according to the CME FedWatch tool.
    • In Monday’s session, investors will focus on the US ISM and revised S&P Global Manufacturing Purchasing Managers Index (PMI) data for February, which will be published during North American trading hours. The ISM Manufacturing PMI is estimated to have grown at a marginally slower pace of 50.8 from 50.9 in January.

    Technical Analysis: Pound Sterling bounces back from 20-day EMA

    The Pound Sterling movers higher above 1.2650 against the US Dollar on Monday. The GBP/USD pair finds buying interest after a mean-reversion move to the 20-day Exponential Moving Average (EMA) near 1.2560.

    The 14-day Relative Strength Index (RSI) falls back within the 40.00-60.00 range, suggesting that the bullish momentum has concluded for now. However, the positive bias remains intact.

    Looking down, the February 11 low of 1.2333 will act as a key support zone for the pair. On the upside, the 50% Fibonacci retracement at 1.2765 will act as a key resistance zone.



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  • USD/INR loses traction on likely RBI intervention

    USD/INR loses traction on likely RBI intervention


    • The Indian Rupee gains traction in Monday’s early European session. 
    • Foreign exchange intervention from the RBI might help limit the INR’s losses. 
    • India’s HSBC Manufacturing PMI and US ISM Manufacturing PMI will take center stage later on Monday. 

    The Indian Rupee (INR) gathers strength on Monday. The potential intervention from the Reserve Bank of India (RBI) could provide some support to the local currency. On the other hand, the latest tariff rounds from US President Donald Trump on Canada, Mexico, and potentially China could boost the US Dollar (USD) and exert some selling pressure on the INR. Additionally, a recovery in crude oil prices could drag the Indian Rupee lower as India is the world’s third-largest oil consumer. 

    Looking ahead, traders will keep an eye on India’s HSBC Manufacturing Purchasing Managers Index (PMI) for February, which will be published later on Monday. On the US docket, the ISM Manufacturing PMI will be released. 

    Indian Rupee rebounds despite Trump’s tariff threats

    • “Markets continue to live with the uncertainty and whiplash of the multitude of tariff proposals in the pipeline,” said MUFG Bank. 
    • India’s real Gross Domestic Product (GDP) grew 6.2% YoY in the fourth quarter (Q4) of 2024, compared to a 5.6% growth (revised from 5.4%) recorded in the previous quarter, according to data released by the National Statistical Office (NSO) on Friday. This figure came in weaker than the 6.3% expected. 
    • The US Personal Consumption Expenditures (PCE) Price Index increased 0.3% in January, in line with expectations, the US Bureau of Economic Analysis showed on Friday. 
    • The US PCE Price Index climbed 2.5% YoY in January, compared to 2.6% in December. The core PCE Price Index, which excludes volatile food and energy prices, climbed 2.6% YoY in January, down from 2.9% in December. Both figures came in line with the market consensus. 

    USD/INR sticks to positive bias in the longer term

    The Indian Rupee trades in negative territory. The bullish outlook of the USD/INR pair prevails, with the price being well-supported above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. Further upside looks favorable as the 14-day Relative Strength Index (RSI) is located above the midline near 63.75. 

    The first upside barrier for USD/INR emerges at 87.53, the high of February 28. A bullish candlestick breaking above this level could lift the pair to an all-time high near 88.00 then 88.50. 

    On the flip side, the initial support level for the pair is seen in the 87.05-87.00 zone, representing the low of February 27 and the round mark. A breach of the mentioned level could drag USD/INR to the next bearish targets at 86.48, the low of February 21, followed by 86.14, the low of January 27. 

     



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  • Australian Dollar recovers recent losses as US Dollar struggles amid growth concerns

    Australian Dollar holds gains following China Manufacturing PMI data


    • The Australian Dollar gains ground following the TD-MI Inflation Gauge, and China Manufacturing PMI data released on Monday.
    • China’s Caixin Manufacturing PMI increased to 50.8 in February from January’s 50.1.
    • The US Dollar struggles as US PCE inflation data aligns with expectations, easing concerns over unexpected US inflation spikes.

    The Australian Dollar (AUD) halted its six-day losing streak on Monday, buoyed by a weaker US Dollar (USD) following the release of January’s Personal Consumption Expenditures (PCE) inflation data on Friday. The report aligned with expectations, easing fears of unexpected inflation spikes in the US.

    Australia’s TD-MI Inflation Gauge fell by 0.2% month-over-month in February, reversing a 0.1% rise in January. This marked the first decline since last August and followed the Reserve Bank of Australia’s (RBA) decision to cut its cash rate by 25 basis points to 4.1% during its first monetary policy meeting of the year, reflecting a continued slowdown in underlying inflation. However, on an annual basis, the gauge rose by 2.2%, slightly below the previous 2.3% increase.

    The AUD also receives upward support from upbeat Chinese economic data. China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) rose to 50.8 in February from January’s 50.1, exceeding market expectations of 50.3. Given China’s role as a key trading partner for Australia, the stronger PMI reading provided a boost to the Australian Dollar.

    However, the AUD’s upside could be limited by escalating US-China trade tensions. Over the weekend, US President Donald Trump announced an additional 10% tariff on Chinese imports starting Tuesday, adding to the 10% tariff imposed last month. On Thursday, Trump stated on Truth Social that 25% tariffs on Canadian and Mexican goods will take effect on March 4.

    Australian Dollar appreciates as concerns over unexpected US inflation ease

    • The US Dollar Index (DXY), which tracks the USD against six major currencies, weakens after three consecutive sessions of gains, hovering around 107.30 at the time of writing. The downside of the Greenback could be limited as US Treasury yields improve, with 2-year and 10-year Treasury yields currently standing at 4.02% and 4.24%, respectively.
    • The US PCE inflation report met expectations, with the monthly headline PCE holding steady at 0.3%. Core PCE rose slightly to 0.3% from December’s 0.2%, while the annual headline PCE stood at 2.6%, slightly exceeding projections but unchanged from December’s figure. Core PCE eased to 2.6%, down from a revised 2.9% in December.
    • Tensions escalated between US President Donald Trump and Ukrainian leader Volodymyr Zelenskyy during peace deal negotiations. Zelenskyy was expected to sign an agreement granting the US greater access to Ukraine’s rare earth minerals and participate in a joint press conference, but the plan was abandoned after a heated exchange between the leaders in front of the media. Following the confrontation, in which Trump openly expressed his disdain, top advisers asked Zelenskyy to leave the White House.
    • President Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.
    • The S&P Global Australia Manufacturing Purchasing Managers Index (PMI) was revised down to 50.4 in February from an initial estimate of 50.6 but remained above January’s 50.2. This marked the second consecutive month of improvement in manufacturing conditions and the strongest growth since February 2023.
    • China’s NBS Manufacturing PMI improved to 50.2 in February versus 49.1 prior. This figure came in stronger than the 49.9 expected. Meanwhile, the NBS Non-Manufacturing PMI climbed to 50.4 in February from 50.2 in January, beating the estimation of 50.3.
    • According to a Wall Street Journal report on the Australian Dollar’s outlook from the Commonwealth Bank of Australia (CBA), heightened trade war risks driven by Trump have become a major concern. China’s response to these trade threats will be a key factor shaping the future performance of the AUD.

    Australian Dollar tests 0.6200 support amid prevailing bearish bias

    The AUD/USD pair is trading around 0.6220 on Monday. The daily chart analysis suggests that the pair remains under pressure, trading below the nine- and 14-day Exponential Moving Averages (EMAs), indicating weakening short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) remains below 50, reinforcing the bearish outlook.

    On the downside, the AUD/USD pair is currently testing key support at the psychological level of 0.6200. A break below this level could drive the price toward 0.6087, its lowest point since April 2020, recorded on February 3.

    The initial resistance is seen at the nine-day EMA of 0.6280, followed by the 14-day EMA at 0.6290. A decisive break above these levels could strengthen short-term momentum, potentially leading the pair to retest the three-month high of 0.6408, reached on February 21.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.44% -0.27% -0.15% -0.10% -0.35% -0.21% -0.12%
    EUR 0.44%   0.06% 0.06% 0.15% -0.01% 0.04% 0.14%
    GBP 0.27% -0.06%   0.13% 0.09% -0.07% -0.02% 0.08%
    JPY 0.15% -0.06% -0.13%   0.26% -0.15% -0.02% 0.03%
    CAD 0.10% -0.15% -0.09% -0.26%   -0.09% -0.11% -0.01%
    AUD 0.35% 0.01% 0.07% 0.15% 0.09%   0.05% 0.15%
    NZD 0.21% -0.04% 0.02% 0.02% 0.11% -0.05%   0.10%
    CHF 0.12% -0.14% -0.08% -0.03% 0.00% -0.15% -0.10%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Economic Indicator

    Caixin Manufacturing PMI

    The Caixin Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s manufacturing sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for CNY.

    Read more.

    Last release: Mon Mar 03, 2025 01:45

    Frequency: Monthly

    Actual: 50.8

    Consensus: 50.3

    Previous: 50.1

    Source: IHS Markit

     



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  • Gold plunges 3% weekly as trade policies, recession fears fuel USD rally

    Gold plunges 3% weekly as trade policies, recession fears fuel USD rally


    • Gold drops over 1% Friday as USD strengthens, hitting 10-day high at 107.66.
    • XAU/USD falls to $2,845 as Fed rate-cut bets rise
    • Trump confirms 25% tariffs on Mexico and Canada, fueling market uncertainty.
    • Fed expected to cut rates by 70 bps in 2025 with first cut projected for June.

    Gold extended its losses on Friday, down more than 1% and over 3% in the week. The US Dollar rose to a ten-day peak of 107.66 amid fears of trade policies in the United States (US) and data that has sparked recessionary worries. The XAU/USD trades at $2,845 after reaching a daily peak of $2,885.

    According to US President Donald Trump, 25% tariffs on Mexican and Canadian products will be applied next week on March 4. The release of the Federal Reserve’s (Fed) preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, hinted that inflation continued progressing toward the 2% Fed goal.

    Expectations that the Fed would continue to ease policy rose after the data. According to Prime Market Terminal, the Fed will lower interest rates by 70 basis points this year with investors projecting the first rate cut in June.

    The Atlanta Fed GDPNow estimate has also been updated for Q1 2025. The model shows the economy will contract from a 2.3% expansion to -1.5 %. After the data, the 10-year US Treasury note yield dropped three basis points, and the US Dollar (USD) advanced on recession woes.

    In the meantime, some Fed speakers crossed the wires. The Cleveland Fed’s Beth Hammack said that a rate hike is not in the cards, and the impact of trade policies on monetary policy and the economy remains uncertain.

    Daily digest market movers: Gold price treads water as US recession looms

    • The core PCE in the US rose 0.3% MoM from December and increased 2.6% YoY, as estimated, down from December’s 2.8% increase.
    • The headline PCE jumped by 2.5% YoY as expected, dipping from 2.6%, and remained unchanged every month at 0.3%, as projected.
    • Meanwhile, traders continued to digest US President Donald Trump’s tariff rhetoric. He said 25% tariffs on Mexico and Canada would start next week, alongside an additional 10% on China.
    • The US 10-year Treasury note yield is at 4.229%, capping the Bullion price decline. US real yields, as measured by the yield in the US 10-year Treasury Inflation-Protected Securities (TIPS), edge lower five bps to 1.853%.
    • Last week, Goldman Sachs revised Gold price projections to $3,100 by the end of 2025.

    XAU/USD technical outlook: Gold extends losses beneath $2,850

    Gold price registers back-to-back bearish candles, a sign that traders are booking profits ahead of the weekend and squaring their portfolios at the end of the month. Once XAU/USD dropped below $2,900, it extended its fall toward $2,832, but a daily close above 2,850 would keep buyers hopeful for higher prices.

    In that outcome, XAU/USD first resistance would be the $2,900 mark, ahead of the year-to-date (YTD) high of $2,956. Otherwise, Gold’s first support would be $2,800, followed by the October 31 daily peak at $2,790 and by the 50-day Simple Moving Average (SMA) at $2,770.

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

     



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  • Japanese Yen surrenders major part of intraday gains against USD; downside seems limited

    Japanese Yen surrenders major part of intraday gains against USD; downside seems limited


    • The Japanese Yen struggles to capitalize on its Asian session gains against a stronger USD. 
    • Firming expectations for more BoJ rate hikes this year should help limit losses for the JPY.
    • Traders now look forward to the release of the crucial US PCE data for a fresh impetus. 

    The Japanese Yen (JPY) surrenders its intraday gains against the broadly stronger US Dollar (USD) after Prime Minister Shigeru Ishiba’s government reduced the FY25/26 budget plan to ¥115.2 trillion. Apart from this, the broadly stronger US Dollar (USD) assists the USD/JPY pair in reversing the Asian session slide to the 149.00 neighborhood. Any meaningful JPY depreciation, however, seems elusive in the wake of hawkish Bank of Japan (BoJ) expectations.

    Investors seem convinced that the BoJ will hike interest rates further this year. The bets were reaffirmed by BoJ Deputy Governor Shinichi Uchida’s remarks, saying that the underlying inflation rate is gradually rising toward the 2% target. This offsets the softer Tokyo Consumer Price Index (CPI) print, which, along with the risk-off mood, should limit losses for the safe-haven JPY. The USD bulls might also opt to wait for the US Personal Consumption Expenditure (PCE) Price Index. 

    Japanese Yen bulls have the upper hand amid rising bets for more BoJ rate hikes this year

    • Japanese Prime Minister Shigeru Ishiba’s government announced that it reduced its FY25/26 Budget plan to ¥115.2 trillion. The government also said they will cut the new bond issuance to JPY28.6 trillion.
    • Bank of Japan Deputy Governor Shinichi Uchida said this Friday that Japan’s inflation rate is gradually rising towards the central bank’s 2% target as the economy sustains a moderate recovery path.
    • The Statistics Bureau of Japan reported that the headline Consumer Price Index (CPI) in Tokyo – Japan’s capital city – decelerated from 3.4% in the previous month to the 2.9% YoY rate in February. 
    • Meanwhile, core CPI – which excludes volatile fresh food prices – eased more than expected, from an 11-month high of 2.5% touched in January to the 2.2% YoY rate during the reported month. 
    • Furthermore, a core gauge that excludes both fresh food and energy prices, and is watched as a gauge of underlying inflation by the BoJ, came in at 1.9%, matching the previous month’s reading. 
    • Separately, Japan’s Industrial Production fell by 1.1% MoM in January. This follows a 0.2% decrease in the previous month and marks the third consecutive month of decline in industrial output.
    • Investors, however, seem convinced that the BoJ will hike interest rates further, which, along with the risk-off mood, boosts the safe-haven Japanese Yen during the Asian session on Friday.
    • The US Dollar stands firm near the weekly top in the wake of Thursday’s data, showing that inflationary pressures continue to rise and backing the case for the Federal Reserve to hold steady. 
    • The second reading of the US Gross Domestic Product showed that the economy expanded by a 2.3% annualized pace during the final quarter of 2024, matching the original estimate. 
    • Additional details of the report published by the US Bureau of Economic Analysis revealed that the GDP Price Index rose 2.4% compared to the initial estimate of 2.2%. 
    • This comes on top of worries that US President Donald Trump’s policies would reignite inflation and put additional pressure on the Federal Reserve to stick to its hawkish stance. 
    • Kansas City Fed President Jeff Schmid said that recent surveys indicate a rise in consumer inflation expectations and that the central bank must stay focused on fully containing price pressures.
    • Cleveland Fed President Beth Hammack noted on Thursday that interest rates are likely on hold for the time being as inflation data starts to pose a growing problem for central policymakers.
    • Philadelphia Fed President Patrick Harker noted that progress toward the 2% inflation target has slowed and that the policy rate remains restrictive to continue putting downward pressure on inflation.
    • Investors now look forward to the release of the US Personal Consumption Expenditure (PCE) Price Index for cues about the Fed’s rate-cut path, which will drive the buck and the USD/JPY pair. 

    USD/JPY needs to move beyond weekly high to support prospects for further gains

    From a technical perspective, spot prices remain confined in a familiar range held since the beginning of this week. Against the backdrop of the recent decline from the vicinity of the 159.00 mark, or the year-to-date high touched in January, the range-bound price action might still be categorized as a bearish consolidation phase. The negative outlook is reinforced by the fact that oscillators on the daily chart are holding deep in negative territory and are still away from being in the oversold zone. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the downside and supports prospects for deeper losses.

    In the meanwhile, the 149.00 round figure now seems to protect the immediate downside ahead of the 148.60-148.55 region, or the multi-month low touched on Tuesday. Some follow-through selling will be seen as a fresh trigger for bearish traders and drag the USD/JPY pair to the 148.00 mark en route to the next relevant support near the 147.35-147.30 area and the 147.00 round figure.

    On the flip side, the 148.80 region, followed by the 150.00 psychological mark and the weekly high, around the 150.30 area, might continue to act as an immediate hurdle. A sustained strength beyond the latter, however, could trigger a short-covering rally and lift the USD/JPY pair further towards the 150.90-151.00 horizontal support breakpoint, now turned strong barrier. The momentum could extend further towards the 151.45 region en route to the 152.00 mark, though it is more likely to remain capped near the 152.40 zone. The latter represents the very important 200-day Simple Moving Average (SMA) and should act as a key pivotal point.

    Japanese Yen FAQs

    The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

    One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

    Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

    The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

     



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  • Australian Dollar appreciates despite a disappointing Q4 Private Capital Expenditure

    Australian Dollar appreciates despite a disappointing Q4 Private Capital Expenditure


    • The Australian Dollar holds gains after the release of a weaker-than-expected Private Capital Expenditure on Thursday.
    • Australia’s Private Capital Expenditure unexpectedly contracted by 0.2% QoQ in Q4 2024, falling short of market expectations for 0.8% growth.
    • The US Dollar continues to strengthen as traders evaluate the economy’s performance and the outlook on tariffs.

    The Australian Dollar (AUD) holds gains against the US Dollar (USD) on Thursday. The AUD/USD pair gains ground despite the release of disappointing Australia’s Private Capital Expenditure, which unexpectedly shrank by 0.2% quarter-on-quarter in the fourth quarter of 2024, missing market expectations of 0.8% growth and after an upwardly revised 1.6% expansion in the previous quarter.

    Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said he expects more positive news on inflation but emphasized the importance of seeing this progress materialize first. He noted that the tightness in Australia’s labor market remains a challenge for controlling inflation.

    The AUD also faced challenges on Wednesday following Australia’s monthly Consumer Price Index (CPI), which rose by 2.5% year-over-year in January, compared to a 2.5% increase seen in December. The market forecast was for 2.6% growth in the reported period.

    The AUD/USD pair faces challenges due to rising risk sentiment as US President Donald Trump said late Monday that sweeping US tariffs on imports from Canada and Mexico “will go forward” when a month-long delay on their implementation expires next week. Moreover, the Trump administration is aiming to tighten chip export controls on China, Australia’s close trading partner.

    However, the downside of the AUD/USD pair could be limited as the People’s Bank of China (PBOC) injected CNY300 billion on Tuesday via the one-year Medium-term Lending Facility (MLF), maintaining the rate at 2%. Additionally, the PBOC injected CNY318.5 billion through seven-day reverse repos at 1.50%, consistent with the prior rate.

    Australian Dollar could depreciate due to increased risk aversion

    • The US Dollar Index (DXY), which measures the USD against six major currencies, gains ground as traders assess the strength of the economy and tariff outlook. The DXY extends its gains to near 106.50 at the time of writing.
    • Federal Reserve Bank of Atlanta President Raphael Bostic said late Wednesday that the Fed should hold interest rates where they are, at a level that continues to put downward pressure on inflation, per Bloomberg.
    • The White House said late Wednesday that US President Donald Trump issued an executive order aimed at implementing the Department of Government Efficiency’s (DOGE) cost-cutting drive, per Reuters. The executive order requires agencies to justify spending, limit travel, and identify surplus federal properties that can be sold.
    • President Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.
    • The Reserve Bank of Australia (RBA) lowered its Official Cash Rate (OCR) by 25 basis points to 4.10% last week—the first rate cut in four years. Reserve Bank of Australia (RBA) Governor Michele Bullock acknowledged the impact of high interest rates but cautioned that it was too soon to declare victory over inflation. She also emphasized the labor market’s strength and clarified that future rate cuts are not guaranteed, despite market expectations.

    Australian Dollar tests 0.6300 support as a bearish bias emerges

    The AUD/USD pair hovers around 0.6300 on Thursday. Analysis of the daily chart indicates that the pair stays below the nine- and 14-day Exponential Moving Averages (EMAs), signaling weakening short-term price momentum. Moreover, the 14-day Relative Strength Index (RSI) remains below 50, reinforcing the prevailing bearish outlook.

    The AUD/USD pair tests immediate support at the psychological level of 0.6300. A break below this threshold could push the pair toward the 0.6087 region, its lowest level since April 2020, recorded on February 3.

    On the upside, the AUD/USD pair may face immediate resistance at the 14-day EMA of 0.6323, followed by the nine-day EMA at 0.6329. A decisive break above these levels could strengthen short-term price momentum, paving the way for the pair to challenge the two-month high of 0.6408, reached on February 21.

    AUD/USD: Daily Chart

    (This story was corrected on February 27 at 02:15 GMT to say, in the first paragraph, that “The Australian Dollar (AUD) holds gains against the US Dollar (USD) on Thursday,” not Wednesday.)

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   0.05% 0.04% 0.07% 0.00% -0.15% -0.06% 0.10%
    EUR -0.05%   -0.00% 0.03% -0.04% -0.19% -0.10% 0.05%
    GBP -0.04% 0.00%   0.06% -0.04% -0.19% -0.10% 0.05%
    JPY -0.07% -0.03% -0.06%   -0.09% -0.24% -0.18% 0.00%
    CAD -0.00% 0.04% 0.04% 0.09%   -0.14% -0.06% 0.09%
    AUD 0.15% 0.19% 0.19% 0.24% 0.14%   0.09% 0.24%
    NZD 0.06% 0.10% 0.10% 0.18% 0.06% -0.09%   0.16%
    CHF -0.10% -0.05% -0.05% -0.00% -0.09% -0.24% -0.16%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Economic Indicator

    Private Capital Expenditure

    The Private Capital Expenditure released by the Australian Bureau of Statistics measures current and future capital expenditure intentions of the private sector. It is considered as an indicator for inflationary pressures. A high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).

    Read more.

     



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  • US Dollar gets some air ahead of GDP and PCE data

    US Dollar gets some air ahead of GDP and PCE data


    • US Dollar Index stabilizes around 106.40, hovering near its lowest levels of 2025.
    • Traders anticipate rate cuts, with Fed bets now pricing in two reductions for 2025.
    • US President Trump confirms 25% tariffs on Canada, Mexico, and the EU but delays implementation until April.
    • Markets await the Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, on Friday.

    The US Dollar Index (DXY), which tracks the performance of the US Dollar against a basket of six major currencies, is attempting a modest recovery on Wednesday but remains near yearly lows at 106.50. Traders continue to weigh increased Federal Reserve (Fed) rate cut expectations and the latest tariff developments from US President Donald Trump.

    Daily digest market movers: US Dollar steadies as tariff tensions rise

    • The US Dollar stabilizes around 106.40 as traders digest escalating tariff risks and growing Fed rate cut expectations.
    • On the tariff front, President Trump confirms 25% tariffs on Canada, Mexico, and the EU but delays their implementation until April.
    • On the Fed front, markets now expect two rate cuts in 2025, marking a shift from previous Fed guidance.
    • Traders await Friday’s Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge.
    • Personal income and spending reports due this week could further shape market expectations.
    • US Q4 GDP figures will provide insights into the economy’s momentum heading into 2025.

    DXY technical outlook: Bulls struggle to gain control

    The US Dollar Index is attempting to recover above 106.50, but momentum remains fragile. The 100-day Simple Moving Average (SMA) at 106.60 is proving a key resistance level, with technical indicators still favoring bearish conditions.

    The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both signal persistent downside pressure. If the DXY fails to reclaim 106.60, further declines toward 106.00 could materialize. Bulls need stronger catalysts to regain control, with the 107.00 level serving as the next key upside barrier.

    Inflation FAQs

    Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.

    The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.

    Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.

    Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.

     



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  • Australian Dollar declines as US Dollar attempts to recover recent losses

    Australian Dollar declines as US Dollar attempts to recover recent losses


    • The Australian Dollar remains tepid following the release of the monthly Consumer Price Index.
    • China’s International Trade Representative and Vice Minister of Commerce met with US business leaders to discuss tariffs.
    • The Trump administration considers tightening chip export controls on China.

    The Australian Dollar (AUD) remains subdued against the US Dollar (USD) for the fourth consecutive day on Wednesday. The AUD/USD pair remains under pressure after Australia’s monthly Consumer Price Index (CPI) showed a 2.5% year-over-year rise in January, matching December’s increase. This fell short of market expectations for 2.6% growth.

    China’s Commerce Ministry announced on Wednesday that the country’s International Trade Representative and Vice Minister of Commerce, Wang Shouwen, met with US business leaders. The discussions focused primarily on tariffs, though no further details were disclosed.

    A Bloomberg report early Tuesday revealed that the Trump administration plans to tighten chip export controls on China, a key trading partner of Australia. The US is reportedly considering stricter restrictions on Nvidia chip exports and may introduce additional limitations on Chinese companies such as SMIC and CXMT.

    The AUD/USD pair struggles amid growing risk sentiment after US President Donald Trump stated late Monday that broad US tariffs on imports from Canada and Mexico “will go forward” once the month-long implementation delay ends next week. Trump asserted that the US has “been taken advantage of” by foreign countries and reaffirmed his intention to impose so-called reciprocal tariffs.

    Australian Dollar depreciates amid increased risk aversion

    • The US Dollar Index (DXY), which measures the USD against six major currencies, falls to near 106.00 with 2-year and 10-year yields on US Treasury bonds declining to 4.09% and 4.28%, respectively, at the time of writing.
    • Federal Reserve Bank of Chicago President Austan Goolsbee remarked on Monday that the US central bank needs greater clarity before considering interest rate cuts.
    • The US Composite PMI fell to 50.4 in February, down from 52.7 in the previous month. In contrast, the Manufacturing PMI rose to 51.6 in February from 51.2 in January, surpassing the forecast of 51.5. Meanwhile, the Services PMI declined to 49.7 in February from 52.9 in January, falling short of the expected 53.0.
    • US Initial Jobless Claims for the week ending February 14 rose to 219,000, exceeding the expected 215,000. Meanwhile, Continuing Jobless Claims increased to 1.869 million, slightly below the forecast of 1.87 million.
    • President Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.
    • China released its annual policy statement for 2025 on Sunday. The statement details strategies to advance rural reforms and promote comprehensive rural revitalization. Additionally, China’s state-supported developers are aggressively increasing land purchases at premium prices, driven by the government’s relaxation of home price restrictions to revitalize the troubled property market.
    • The People’s Bank of China (PBOC) injected CNY300 billion on Tuesday via the one-year Medium-term Lending Facility (MLF), maintaining the rate at 2%. Additionally, the PBOC injected CNY318.5 billion through seven-day reverse repos at 1.50%, consistent with the prior rate.
    • The Reserve Bank of Australia (RBA) lowered its Official Cash Rate (OCR) by 25 basis points to 4.10% last week—the first rate cut in four years. Reserve Bank of Australia (RBA) Governor Michele Bullock acknowledged the impact of high interest rates but cautioned that it was too soon to declare victory over inflation. She also emphasized the labor market’s strength and clarified that future rate cuts are not guaranteed, despite market expectations.

    Australian Dollar moves toward 14-day EMA barrier after breaking below 0.6350

    AUD/USD trades near 0.6340 on Wednesday, breaking below the ascending channel that reflects a weakening bullish market bias. However, the 14-day Relative Strength Index (RSI) remains above 50, supporting the positive outlook is still in play.

    On the upside, the AUD/USD pair tests the immediate barrier at a nine-day Exponential Moving Average (EMA) of 0.6342. A successful break above this level could improve the short-term price momentum and support the pair in testing the key psychological resistance at 0.6400, with the next hurdle at the ascending channel’s upper boundary around 0.6450.

    The AUD/USD pair tests immediate support at the 14-day EMA of 0.6331. A decisive break below this level could cause the emergence of the bearish bias and lead the pair to test the psychological level of 0.6300.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   0.09% 0.11% 0.36% 0.04% 0.18% 0.11% 0.07%
    EUR -0.09%   0.03% 0.27% -0.06% 0.09% 0.02% -0.02%
    GBP -0.11% -0.03%   0.23% -0.08% 0.06% -0.00% -0.04%
    JPY -0.36% -0.27% -0.23%   -0.32% -0.18% -0.26% -0.28%
    CAD -0.04% 0.06% 0.08% 0.32%   0.14% 0.08% 0.05%
    AUD -0.18% -0.09% -0.06% 0.18% -0.14%   -0.05% -0.09%
    NZD -0.11% -0.02% 0.00% 0.26% -0.08% 0.05%   -0.04%
    CHF -0.07% 0.02% 0.04% 0.28% -0.05% 0.09% 0.04%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

     



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