US initial jobless claims fell to 206K. This was below the 225K estimate and down from the prior week’s revised 229K, according to the US Department of Labor. Focus now turns to Friday’s releases: the Core PCE Price Index, the advance Q4 US GDP estimate, and preliminary February PMI figures. The US Dollar Index traded near a four-week high of 97.90 after the labor data. Markets also reviewed the latest FOMC Minutes, which showed the Committee was split.

Key Fx Moves And Central Bank Watch

EUR/USD traded near 1.1770 after reports that ECB President Christine Lagarde may leave before her planned retirement in October 2027. GBP/USD traded around 1.3460 as UK inflation cooled and the job market softened. USD/JPY was near 154.90, rebounding from the prior day’s move. Firmer US data and a hawkish tone in the FOMC Minutes supported the pair. AUD/USD hovered around 0.7050 after losing momentum following last week’s three-year high. USD/CAD held near 1.3700, extending a week-long rise. The Bank of Canada kept a dovish stance, and inflation stayed close to its 2% target. Gold traded at $4,982 with little daily change as geopolitical tensions eased. Planned data included UK January Retail Sales, Germany and Eurozone flash PMIs, UK flash S&P Global PMIs, US December Core PCE, and February US S&P Global PMIs. Central banks bought 1,136 tonnes of gold worth about $70 billion in 2022, the largest annual purchase on record, according to the World Gold Council.

One Year Comparison And Market Implications

In February 2025, the US Dollar Index rose to around 97.90 on very strong labor market data. Today, the picture is different. The Dollar is much higher at 104.55 after a year of restrictive policy. With the latest Non-Farm Payrolls report showing job growth slowing to 155,000, we should expect more volatility as markets debate a possible Federal Reserve pivot. A year ago, EUR/USD was near 1.1770. It has since fallen to around 1.0750 as the Eurozone economy stayed weak. Germany’s manufacturing PMI recently came in at 46.1, still in contraction. This increases the risk that the European Central Bank cuts interest rates before the Fed. We should consider strategies that can benefit if the pair continues to fall in the coming weeks. In February 2025, GBP/USD was near 1.3460, pressured by a cooling UK economy. The pair now trades lower at 1.2580. The UK is still dealing with sticky inflation, last reported at 3.2%, well above the Bank of England’s target. This mix of slow growth and high inflation suggests larger and less predictable moves in the Pound. The rate gap has helped push USD/JPY from 154.90 a year ago to 162.30 today. The Bank of Japan has kept an ultra-loose stance, while the Federal Reserve’s key rate stands at 4.75%. As long as this wide gap remains, the pair is more likely to keep rising. A year ago, AUD/USD was pulling back from a three-year high and traded around 0.7050. It now trades at 0.6540 as slowing global growth, especially in China, has weighed on the commodity-linked currency. This sensitivity to risk sentiment may keep the Aussie under pressure. Last year, Gold traded at $1,982 an ounce as geopolitical tensions eased. Today, Gold is much higher at $2,150. It has been supported by economic uncertainty and strong central-bank demand, with central banks adding more than 800 tonnes in 2025. With questions still around the Fed’s next move, Gold remains a useful hedge against a weaker Dollar or a broader market decline. Create your live VT Markets account and start trading now.

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