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24/03/2025 - 08:32 UTCThe US dollar posted some recovery against most major currencies last week as reflected by a 0.41% increase in the USDX on the iFOREX trading platform. On April 2nd, President Donald Trump's administration is anticipated to shift towards a more targeted application of reciprocal tariffs, leading to a cautious market reaction. This change, reported by the Wall Street Journal, involves moving away from widespread industry tariffs and instead focusing on countries exhibiting substantial trade deficits with the United States. Notably, major G-20 economies, specifically key Asian exporters like China, Japan, India, and Vietnam, are expected to be among the primary targets.
Energy prices extended their recent gains, with the two main crude oil benchmarks WTI and Brent up by 1.53% and 2.24% respectively in the past week. Global markets experienced volatility as investors balanced the potential reduction of Iranian oil exports due to new U.S. sanctions against the possibility of increased Russian supply, stemming from ongoing ceasefire negotiations with Ukraine. Compounding this, the prospect of OPEC+ raising production as early as April added further complexity to the supply outlook.
Wall Street sentiment shifted back to positive in the past week, driven by investor speculation that President Trump would moderate his tariff policies to minimize their economic repercussions. Despite a largely flat close on Friday, the major U.S. stock indices achieved modest weekly gains, rebounding from recent six-month lows. During the week, quarterly earnings reports are anticipated from Lululemon Athletica, Walgreens Boots, BYD and Gamestop.
In the cryptocurrency sector, Bitcoin and Ethereum, the market's leading cryptocurrencies, saw slight reductions in value during the previous week, mirroring trends observed on Wall Street. This decline was attributed to growing economic uncertainty surrounding the U.S. economic outlook. However, the beginning of this week witnessed a shift towards positive sentiment. Notably, Bitcoin surpassed the $87,000 threshold, driven by investor optimism following reports indicating that U.S. President Donald Trump intends to adopt a more selective strategy for implementing new trade tariffs, effective April 2nd.
For the week ahead, attention will likely turn to U.S. and Canada growth data in the form of GDP, Flash Manufacturing & Services PMIs from the U.S. and the eurozone, the Core PCE Price Index, CPI numbers from Tokyo and the U.K. and New and Pending Home Sales from the U.S.
The EUR/USD pair edged lower on Friday as the US Dollar (USD) strengthened following the Federal Reserve’s (Fed) firm stance on maintaining interest rates.
The Fed opted to keep interest rates steady in the 4.25%-4.50% range for the second consecutive meeting, in line with market expectations. During the post-meeting press conference, Fed Chair Jerome Powell emphasized that the central bank is in no rush to initiate rate cuts. He cited “unusually elevated” uncertainty surrounding the US economic outlook as justification for maintaining a restrictive monetary policy stance. Powell also highlighted potential economic risks linked to new policies under US President Donald Trump, warning that they could slow growth and fuel inflationary pressures in the near term.
Supporting this cautious approach, Chicago Fed President Austan Goolsbee echoed similar sentiments during an interview with CNBC on Friday.
Looking ahead, investors will turn their attention to the release of the flash US and Europes PMI data for March later today, which could provide further insights into the economic outlook.
Gold prices retreated for the second consecutive session on Friday, but the precious metal still ended higher for the third consecutive week.
With no major catalysts driving price action, traders remained focused on President Donald Trump’s trade policies, which continue to influence market sentiment. Even comments from Federal Reserve (Fed) officials failed to significantly impact gold prices.
On the geopolitical front, tensions escalated as Israel announced an intensification of military operations in Gaza, effectively ending a two-month ceasefire in a bid to pressure Hamas into releasing hostages. The renewed conflict adds another layer of uncertainty to global markets.
Oil prices marked a second straight weekly gain as fresh U.S. sanctions on Iran and the latest output plan from the OPEC+ producer group fueled expectations of tighter global supply.
On Thursday, the U.S. Treasury announced a new round of Iran-related sanctions, targeting an independent Chinese refiner for the first time, along with other entities and vessels involved in delivering Iranian crude to China.
Oil prices also found support from OPEC+’s newly announced plan for seven member countries to implement deeper production cuts to compensate for exceeding agreed output levels.
Market participants will closely monitor whether major producers adhere to the latest production curbs, as further noncompliance could influence the market outlook.
The US 500 managed to snap a four-week losing streak on Friday, eking out a modest gain despite another turbulent week marked by trade policy uncertainty and a Federal Reserve policy update.
President Donald Trump indicated on Friday that his proposed reciprocal tariffs, set to take effect on April 2, will include some "flexibility." His remarks come amid ongoing uncertainty over trade policy, with the administration sending mixed signals on tariffs throughout the month.
The Federal Reserve provided markets with temporary relief this week by holding interest rates steady as expected. However, policymakers revised their economic projections, raising their inflation forecast while cutting the growth outlook for 2025.
In the corporate sector, FedEx shares tumbled more than 6% after the company cut its annual profit and revenue outlook.
Nike also struggled, slipping over 5% after its fiscal fourth-quarter revenue forecast fell short of analysts' expectations.
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