Key Moves Across Major Pairs
USD/JPY held near 159.00, backed by higher US yields, while the Yen stayed weak due to policy gaps. AUD/USD touched 0.6940, helped at times by a softer Dollar but limited by growth worries tied to weak PMIs and higher energy costs. Gold traded around $4,406 after Monday’s low at $4,098, with support from geopolitical risk but capped by yields and the firm Dollar. Data due includes Australia CPI (Feb), UK CPI, PPI and RPI, Switzerland ZEW expectations (Mar), Germany IFO (Mar), and the SNB bulletin (Q1). Later releases include Germany GfK (Apr), Eurozone GDP (Q4), US jobless claims, New Zealand ANZ–Roy Morgan confidence (Mar), UK confidence (Mar) and retail sales (Feb), Eurozone HICP (Mar) and US Michigan sentiment. WTI pricing is shaped by supply and demand, OPEC quotas, the US Dollar, and API and EIA stock reports, which are within 1% of each other 75% of the time. A year ago, we saw the US Dollar Index pushing towards 99.50, fueled by an aggressive Federal Reserve and soaring yields. Today, with the DXY trading closer to 95.00, the landscape has clearly shifted as the Fed now signals a more patient approach to interest rates. This suggests that continuing to bet on broad dollar strength, a winning strategy in early 2025, is now a much riskier proposition. We are watching oil prices closely, as West Texas Intermediate now trades near $78 per barrel, a notable drop from the $92 level seen this time last year. The primary inflation driver has shifted from geopolitical supply shocks to persistent tightness in labor markets. This means traders should focus less on oil supply headlines and more on employment data, like last week’s US initial jobless claims of 215,000, for clues on inflation.What Traders Are Watching Now
The EUR/USD has shown significant recovery from the 1.1580 zone it struggled with in March 2025, when poor business activity data weighed heavily on the currency. Now, with the latest preliminary inflation figures from the Eurozone showing a 3.2% annual rate, the European Central Bank’s policy decisions are the main driver. We see potential for further euro strength if upcoming growth data confirms the bloc is avoiding a deep recession. Looking back, the British Pound was falling hard near 1.3385 due to intense cost pressures in the United Kingdom. While the situation has stabilized, the upcoming UK inflation data remains a critical event for sterling pairs. Any surprise to the upside on inflation could force the Bank of England’s hand and introduce significant volatility. The extreme policy divergence that sent USD/JPY screaming towards 159.00 has cooled considerably. The pair’s pullback reflects the narrowing interest rate gap between the US and Japan. Traders who were riding that powerful uptrend last year must now consider strategies that profit from range-bound trading or even further yen strength. Gold is a different story today compared to last year when its upward momentum was capped near $4,400 by the strong dollar. With US yields having pulled back from their 2025 peaks, gold is showing renewed strength. We believe call options on gold could be an effective way to play the current macroeconomic environment. Create your live VT Markets account and start trading now.
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