Important calendar events
The dollar rallied last week, and the index rose from 103.4 to 104.1. US treasury yields declined, with the US 10-year bond yield dropping from 4.30% to 4.26%.
The US Federal Reserve kept interest rates unchanged at its policy meeting on Wednesday. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%. Policymakers remained cautious and opted to keep interest rates steady under a climate of economic and inflationary statements.
The Fed, however, updated its ‘dot plot’, which is a summary of the central bank’s economic projections and reflects the central bank’s rate outlook. The latest FOMC dot plot indicated that FOMC members expect interest rates to reach a median value of 3.9% in 2025. This indicates that policymakers expect to deliver approximately two more rate cuts this year of 25 basis points each, raising market expectations of future rate cuts. Market expectations of rate cuts in 2025 are currently mixed. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible. The Fed also revised its economic projections, with US GDP estimated to drop to 1.7% in 2025, down from a previous estimate of 2.1%, while the unemployment rate is expected to reach 4.4% by the end of 2025, up from a previous projection of 4.3%.
Fed Chair Jerome Powell delivered a hawkish message after the policy meeting, stating that the central bank is not hurrying to lower interest rates. Powell cited economic instability and elevated inflation risks due to trade tariffs as the reasons behind the Fed’s decision to keep interest rates steady.
On the data front, US Unemployment Claims released on Thursday rose to 223K for the week ending March 15, up from 221K the week before.
Industrial Production in the US expanded by 0.7% in February according to data released on Tuesday, after rising by 0.3% in January, beating market expectations of 0.2% growth. Retail Sales on Monday fell short of expectations, raising concerns over the health of the US economy. Retail Sales rose by 0.2% in February after contracting by 1.2% in January but missed market expectations of 0.7% growth. Core Retail Sales, which exclude the sales of automobiles, rose by 0.3% in February, after dropping by 0.6% in January, which was in line with expectations.
Headline inflation in the US rose by 2.8% year-on-year in February after rising by 3.0% in January against expectations of a 2.9% print. Monthly inflation rose by just 0.2% in February, after rising by 0.5% in January against a 0.3% rise anticipated. Core CPI, which excludes food and energy, rose by 0.2% in February, which was significantly lower than January’s reading of 0.4% and fell below expectations of 0.3%. Annual Core CPI rose by 3.1% in February, below the 3.2% estimate down from 3.3% in January.
Preliminary GDP data showed that the US economy expanded by 2.3%, following a 3.1% expansion in the third quarter of 2024 and falling below market estimates of 2.7% growth. In addition, the US economy expanded by 3.0% in the second quarter of 2024 and by 1.4% in the first quarter.
US President Donald Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. Trump has threatened to impose reciprocal tariffs on many countries, which would raise US import taxes to match those imposed by the country’s other trading partners. Markets this week will continue to focus on Trump’s economic policies and trade tariffs and Trump’s statements are likely to cause volatility in the price of the dollar.
Trump’s tariffs may spark global trade wars and are causing turmoil in markets. Import taxes will raise the price of many products, fueling inflationary pressures. Other nations are likely to reciprocate with tariffs of their own, starting global trade wars, which may lead to economic deterioration and rising inflation in many countries. Trump’s economic policies are raising concerns that the US economic growth will slow down. Many analysts are already expressing concerns that the US will enter a recession.
This coming week, US Manufacturing and Services PMI data due on Monday will provide insight into the health of these primary economic sectors. Final GDP data for Q5 of 2024 on Thursday are expected to show that the US economy expanded by 2.4% against a previous reading of 2.3%. Core PCE Price Index data on Friday are this week’s most highly anticipated fundamentals as this is the Fed’s preferred inflation gauge.
EUR/USD gained strength last week, rising from 1.087 to 1.095 on Thursday, then started to decline ending the week near 1.082. If the EUR/USD pair declines, it may find support at 1.076, while resistance may be encountered near 1.095.
The ECB lowered its benchmark interest rate by 25 basis points at its latest policy meeting, bringing its main refinancing rate down to 2.65% from 2.90%. In her speech after the policy meeting, ECB President Christine Lagarde reiterated her former statement that the central bank’s policy will remain data-dependent and warned that the ECB will need to stay vigilant in these uncertain times.
Lagarde testified before the Committee on Economic and Monetary Affairs of the European Parliament on Thursday. In her testimony, Lagarde stressed the ECB's commitment to lowering inflation in the Eurozone sustainably to the central bank’s 2% target. Lagarde also stressed, however, that US trade tariffs and retaliatory measures could raise inflation in the Eurozone by approximately half a percentage point.
Hopes of political stability in Germany are boosting the Euro. Germany is the Eurozone’s leading economy and an official government has not yet been formed after the German Federal elections in February. It seems likely, however, that Germany’s conservatives led by prospective Chancellor Frederich Merz and the Social Democratic Party will form a coalition. The leaders of the two parties have agreed on a restructure of Germany’s debt that will widen the country’s borrowing limit, and boost defense spending and economic growth. The historic debt reform was finally passed by the German Parliament on Tuesday, boosting the Euro. Germany's Bundestag has finally approved Merz’s plan and has voted to reform the country’s debt.
On the data front, the German ZEW Economic Sentiment Index rose to 51.6 in March from 26 in February, exceeding market expectations of 48.1, indicating improved economic sentiment in Germany. The Eurozone ZEW Economic Sentiment Index rose to 39.8 in March from 24.2 in February, beating market expectations of a 39.6 print.
Revised GDP data showed that the Eurozone economy expanded by 0.2% in the final quarter of 2024 after expanding by 0.3% in the second quarter, against original estimates of 0.1% growth. The economic outlook of the EU remains fragile as prolonged tightening has brought the Euro area economy to the brink of recession.
Final CPI data on Wednesday showed that Eurozone inflation rose to 2.3% year-on-year in February after rising by 2.5% in January, against a previous reading of 2.4%. Core CPI, which excludes food and energy, dropped to 2.6% in February from 2.7% in January.
GBP/USD rose to 1.301 mid-week, but pared gains towards the end of the week, dropping to 1.291. If the GBP/USD rate goes up, it may encounter resistance at 1.304, while support may be found near 1.291.
BOE policymakers kept interest rates steady in March and the Official Bank Rate was maintained at 4.5%. MPC members voted 8-1 to keep rates on hold with only one member voting for a 25 basis point rate cut.
In his speech after the policy meeting, Bank of England Governor Andrew Bailey stated that there is a lot of uncertainty at the moment but still thinks that interest rates are on a declining path. The BOE currently anticipates that the British economy will grow by 0.25% in the current quarter, up from 0.1% previously.
On the data front, labor data released on Thursday showed that the British Unemployment Rate stayed unchanged at 4.4% in the three months to January. The number of people claiming jobless benefits increased by 44.2K in February, compared with a 2.8K rise in January. Meanwhile, Average Earnings rose by 5.8% in the three months to January after rising by 6.1% in the three months to December.
The British economy contracted unexpectedly by 0.1% in January after expanding by 0.4% in December, missing expectations of 0.1% growth. Preliminary GDP data for the fourth quarter of 2024 showed that the British economy expanded by 0.1% against estimates of 0.1% contraction and following economic stagnation in the third quarter of 2024.
Price pressures in the UK are rising, reducing the odds of a BOE rate cut in February and putting pressure on the Sterling. Headline inflation in the UK rose by 3.0% annually in January up from 2.5% in December, against expectations of a 2.8% print. Core inflation, which excludes food and energy, rose by 3.7% year-on-year in January from 3.2% in December, which was in line with expectations.
USD/JPY traded sideways last week, oscillating around the 149.2 level. If the USD/JPY pair declines, it may find support at 146.5. If the pair climbs, it may find resistance at 151.3.
The BOJ held interest steady at 0.50% on Wednesday, as anticipated. BOJ Governor Kazuo Ueda stated that the central bank will keep adjusting the degree of monetary easing to support the country’s economy. Ueda stressed, however, that inflation in Japan remains below the BOJ’s 2% target, lowering rate hike expectations and boosting the Yen.
Markets anticipate that the BOJ will raise interest rates at least one more time this year. The BOJ is expected to raise interest rates by approximately 75 basis points in the next two years, which will bring the central bank’s peak rate to 1.25%.
Final GDP data for the final quarter of 2024 showed that the Japanese economy expanded by only 0.6% against expectations of 0.7% growth. Final GDP data for the third quarter of 2024 showed that Japan’s economy expanded by 0.3%, down from 0.7% in the second quarter.
Inflation in Japan is on the rise, raising the odds of future rate hikes and providing support for the Yen. The headline Tokyo CPI inflation rose to 3.4% annually in January from 3.0% in December. National Core inflation in Japan came in at 3.0% year-on-year in February against expectations of a 2.9% print but came down from January’s 3.2% print.
Gold prices rose to a historical high of $3,057 per ounce on Thursday but lost their bullish momentum, ending the week near $3,020 per ounce. If gold prices rise, they may encounter resistance at the psychological level of $3,100 per ounce, while if gold prices decline, support may be encountered near $2,830 per ounce.
Gold prices have been typically directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar rallied last week, and the index rose from 103.4 to 104.1. US treasury yields declined, with the US 10-year bond yield dropping from 4.30% to 4.26%.
Gold prices reached a new all-time high of $3,057 per ounce on Thursday and are likely to touch new historical highs in the following days.
Gold prices are supported by rising Fed rate cut expectations. The US Federal Reserve kept interest rates unchanged at its policy meeting on Wednesday. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%. Policymakers remained cautious and opted to keep interest rates steady under a climate of economic and inflationary statements.
The Fed, however, updated its ‘dot plot’, which is a summary of the central bank’s economic projections and reflects the central bank’s rate outlook. The latest FOMC dot plot indicated that FOMC members expect interest rates to reach a median value of 3.9% in 2025. This indicates that policymakers expect to deliver approximately two more rate cuts this year of 25 basis points each, raising market expectations of future rate cuts. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible.
Fed Chair Jerome Powell delivered a hawkish message after the policy meeting, stating that the central bank is not hurrying to lower interest rates. Powell cited economic instability and elevated inflation risks due to trade tariffs as the reasons behind the Fed’s decision to keep interest rates steady.
Hostilities in the Gaza area were resumed this week, breaking the ceasefire deal between Israel and Hamas. Israel launched an airstrike in the Gaza area, killing more than 400 people and breaking the ceasefire deal. The Israeli government threatened that there was more to come, shuttering the peace in the region and propelling gold prices upward. Meanwhile, Russian President Vladimir Putin agreed to pause attacks on Ukraine’s energy infrastructure for 30 days but has so far not accepted a full ceasefire against Ukraine.
Uncertainty over US President Donald Trump’s future policies and trade tariffs promotes a risk aversion sentiment. Concerns that Trump’s trade policies may ignite global trading wars are raising the appeal of safe-haven assets, such as gold. Trump’s tariffs are likely to raise global inflation and lower the economic outlook, thus promoting a risk aversion sentiment that boosts safe-haven assets. Trump’s economic policies are raising concerns that the US economic growth may slow down. Many analysts are already expressing concerns that the US will enter a recession.
Oil prices gained strength last week, with WTI price ending the week near $68.5 per barrel. If oil prices retreat, they may encounter support near $65.2 per barrel, while resistance may be found near $68.8 per barrel.
Oil prices have been volatile due to geopolitical instability. Hostilities in the Gaza area were resumed, breaking the ceasefire deal between Israel and Hamas. Israel launched an airstrike in the Gaza area, killing more than 400 people and breaking the ceasefire deal. The Israeli government threatened that there was more to come, shuttering the peace in the region and boosting oil prices. The Israeli military has also reported the launch of a ground incursion into Gaza. In addition, US strikes over the weekend on Iran-backed Houthis militants that have been attacking commercial vessels in the Red Sea, propelled oil prices higher.
On the other hand, Russian President Vladimir Putin agreed to pause attacks on Ukraine’s energy infrastructure for 30 days causing oil prices to plummet late on Tuesday. However, both sides resumed assaults overnight, raising questions about the validity of the peace treaty. In addition, Putin has rejected a US proposal for a full peace treaty, boosting oil prices.
OPEC+ issued a new production plan last week to compensate for overproduction, boosting oil prices. OPEC’s new plan will be applied to seven of its member nations and will involve monthly oil production cuts, ranging between 189k barrels/day and 435k barrels/day.
Oil prices gained strength last week, over fresh US sanctions against Iran. The US sanctioned a Chinese refiner for buying Iranian crude oil and an oil terminal in China for handling Iranian oil.
Oil prices are kept in check by high central banks’ interest rates. The US Federal Reserve kept interest rates unchanged at its policy meeting on Wednesday. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%. Policymakers remained cautious and opted to keep interest rates steady under a climate of economic and inflationary statements.
The Fed, however, updated its ‘dot plot’, which is a summary of the central bank’s economic projections and reflects the central bank’s rate outlook. The latest FOMC dot plot indicated that FOMC members expect interest rates to reach a median value of 3.9% in 2025. This indicates that policymakers expect to deliver approximately two more rate cuts this year of 25 basis points each, raising market expectations of future rate cuts. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible.
Fed Chair Jerome Powell delivered a hawkish message after the policy meeting, stating that the central bank is not hurrying to lower interest rates. Powell cited economic instability and elevated inflation risks due to trade tariffs as the reasons behind the Fed’s decision to keep interest rates steady.
Trump has been using threats of imposing trade tariffs as a negotiation tool to further his agenda with other countries. Trump has threatened to impose reciprocal tariffs on many countries, which would raise US import taxes to match those imposed by the country’s other trading partners.
Trump’s tariffs may spark global trade wars and are causing turmoil in markets. Trump has threatened to impose heavy tariffs on Canadian products, including energy products. The threat of tariffs on Canadian energy products, which are Canada’s main exports to the US, is boosting oil prices.
Bitcoin price rose above $87,000 mid-week but dipped to $85,500 over the weekend. If BTC price declines, support can be found at $79,800, while resistance may be encountered at $87,400.
Ethereum price edged higher last week, trading close to the $2,000 level over the weekend. If Ethereum's price declines, it may encounter support near $1,750, while if it increases, it may encounter resistance near $2,150.
Most major cryptocurrencies are under pressure due to concerns that US President Donald Trump’s trade policies may start global trading wars. The uncertainty over Trump’s future policies and trade tariffs is generating a risk aversion sentiment, putting pressure on crypto markets. Trump’s tariffs are likely to raise global inflation and lower the economic outlook, thus promoting a risk aversion sentiment that puts pressure on crypto markets. Trump’s economic policies are also raising concerns that the US economic growth will slow down. Many analysts are already expressing concerns that the US will enter a recession.
Trump has announced the creation of a national Bitcoin reserve, stressing his determination to make the US the crypto capital of the world. The US reserve will be created with Bitcoin already owned by the federal government through seizures due to criminal activities according to a statement by crypto Czar David Sacks. Fron now on, the US government will cease to sell Bitcoin and will stockpile it instead as a store of value. Bitcoin price, however, has continued to retreat after Trump’s launch of a US Bitcoin reserve, as global economic concerns have lowered risk appetite.
Cryptocurrency prices are also affected by central banks’ interest rates. High interest rates stifle economic growth, putting pressure on crypto markets. The US Federal Reserve kept interest rates unchanged at its policy meeting on Wednesday. FOMC policymakers voted unanimously to maintain the federal funds range to a target range of 4.25% to 4.50%. Policymakers remained cautious and opted to keep interest rates steady under a climate of economic and inflationary statements.
The Fed, however, updated its ‘dot plot’, which is a summary of the central bank’s economic projections and reflects the central bank’s rate outlook. The latest FOMC dot plot indicated that FOMC members expect interest rates to reach a median value of 3.9% in 2025. This indicates that policymakers expect to deliver approximately two more rate cuts this year of 25 basis points each, raising market expectations of future rate cuts. Markets are pricing in two more rate cuts this year, with the first rate cut in June, while a third rate cut is also considered possible.
Fed Chair Jerome Powell delivered a hawkish message after the policy meeting, stating that the central bank is not hurrying to lower interest rates. Powell cited economic instability and elevated inflation risks due to trade tariffs as the reasons behind the Fed’s decision to keep interest rates steady.
Hostilities in the Gaza area were resumed this week, breaking the ceasefire deal between Israel and Hamas and promoting a risk aversion sentiment. Israel launched an airstrike in the Gaza area, killing more than 400 people and breaking the ceasefire deal. The Israeli government threatened that there was more to come, shuttering the peace in the region, and putting pressure on crypto markets.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Written by:
Myrsini Giannouli
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