Euro rises after best weekly performance in 16 years
The euro rose in European trade on Monday against a basket of major rivals, maintaining gains for the second session against the dollar, and about to touch four-month highs after marking the best weekly performance in 16 years.
Following the European Central Bank’s latest policy meeting, the odds of a rate cut in April declined as traders now await more data and clues.
The Price
The EUR/USD pair rose 0.4% today to $1.0871, with a session-low at $1.0827.
The euro rose 0.45% on Friday against the dollar, marking the fourth profit in five days, and hitting a four-month high at $1.0888 following weak US jobs data.
The euro rose 4.4% last week against the greenback, the best weekly performance since March 2009.
The gains come amid record fiscal spending plans in Germany, which boosted inflation forecasts and might force the European Central Bank to tighten its policies once more to face inflationary pressures.
European Rates
The European Central Bank cut main borrowing rates by 25 basis points to 2.5% as expected, noting in its statement that inflation has slowed down in line with forecasts.
The ECB now expects inflation to hit 2.3% this year, before slowing down to 1.9% in 2026, before rising to 2% in 2027.
The ECB reduced forecasts for eurozone economic growth in 2025 to 0.9%, and in 2026 to 1.2%, and in 2027 to 1.3%.
ECB President Christine Lagarde said the decision to cut interest rates was in line with economic developments and data in the eurozone.
She noted that inflation started to fall considerably in line with forecasts, and will likely settle at the targets sustainably.
Reuters reported that the ECB policymakers expect a pause in rate cuts in April before embarking on another round of cuts.
The odds of an ECB rate cut in April is now less than 50%, compared to a 60% chance next week.
Yen trades near five-month peak on risk aversion
The yen rose in Asian trade on Monday against a basket of major rivals, resuming gains against the dollar and about to touch five-month highs on risk aversion as traders buy up safe havens.
The gains are boosted by a drop in US 10-year treasury yields following weak labor data, which bolstered the case for a Fed rate cut in the first half of the year.
The Price
The USD/JPY pair fell 0.55% today to 147.09 yen per dollar, with a session-high at 147.94.
The yen closed down 0.1% on Friday against the dollar, marking the first loss in three days on profit-taking away from a five-month high at 146.94.
The yen rallied 1.7% last week, marking the second weekly profit in three weeks as US yields dropped.
Safe Havens
Most global stock markets lost ground amid mounting concerns about the stability of the US economy due to Donald Trump’s aggressive trade policies, in turn hurting the risk appetite.
Investors are worried about slower US growth after aggressive tariffs on major trade partners, while recent labor data and government layoffs raised more concerns.
President Trump said during a Fox News interview that the US is undergoing a transition phase, with return of wealth to the US through trade and economic policies, including tariffs to boost local industry.
Japanese Rates
The odds of a Bank of Japan interest rate hike in March stood at 65%.
Now investors await more data on Japanese inflation, unemployment, and wages.
US Yields
US 10-year treasury yields fell 1.1% on Monday, pressuring the greenback, amid growing concerns about US growth in the first quarter with the economy adding less jobs than expected in February.
Slower US growth would bolster the odds of a Fed rate cut in the first half of the year.
According to the Fedwatch tool, the odds of a 0.25% Fed rate cut stood at just 3%.
Ripple declines but still marks gigantic 16% weekly profit
Ripple fell on Friday on profit-taking as traders wrap up their weekly trades while the risk appetite wavers.
Earlier data showed US unemployment rose to 4.1% in February from 4.0% in January, missing estimates of 4.1%.
US average wages rose 0.3% in February as expected, slowing down from 0.5% in the previous reading.
The US economy added 151 thousand new jobs in February, below estimates of 159 thousand, but still up from 125 thousand in the previous reading.
Federal Reserve Chair Jerome Powell said in a speech at the Chicago University that the Fed will wait to see the impact of President Donald Trump on the US economy before taking further monetary policy measures.
Powell asserted the need for patience as global uncertainty surges due to spiking trade protectionism.
He said that US consumer spending could slow down in the first quarter of the year after a strong performance late last year, amid ongoing uncertainty.
However, Powell believes the US economy is in a good position due to the strong labor sector, with the latest payrolls report indicating the resilience of the labor market.
Cryptocurrencies were boosted this week after President Trump’s announcement of a plan to set up a strategic crypto reserve that includes bitcoin, ethereum, ripple, cardano, and solana.
Ripple
On trading, ripple tumbled 4.1% as of 20:48 GMT to $2.48, with a weekly profit of 16.3%.
Loonie loses ground after jobs data
The Canadian dollar fell against most major rivals on Friday following mixed jobs data.
Canada's jobless rate held steady at 6.6% in February, beating estimates of a rise to 6.7%.
Canada's economy added 1.1 thousand new jobs in February, below estimates of 19.7 thousand, and down from 76.0 thousand in the previous reading.
On trading, the Canadian dollar fell 0.5% as of 20:44 GMT to 0.6958.
Aussie
The Australian dollar fell 0.4% as of 20:44 GMT against the US counterpart to 0.6310.
US Dollar
The dollar index fell 0.2% as of 20:23 GMT to 103.8, with a session-high at 104.2, and a low at 103.8.
US unemployment rose to 4.1% in February from 4.0% in January, missing estimates of 4.1%.
US average wages rose 0.3% in February as expected, slowing down from 0.5% in the previous reading.
The US economy added 151 thousand new jobs in February, below estimates of 159 thousand, but still up from 125 thousand in the previous reading.
Federal Reserve Chair Jerome Powell said in a speech at the Chicago University that the Fed will wait to see the impact of President Donald Trump on the US economy before taking further monetary policy measures.
Powell asserted the need for patience as global uncertainty surges due to spiking trade protectionism.
He said that US consumer spending could slow down in the first quarter of the year after a strong performance late last year, amid ongoing uncertainty.
However, Powell believes the US economy is in a good position due to the strong labor sector, with the latest payrolls report indicating the resilience of the labor market.