US dollar on track for fresh weekly loss
The US dollar fell in European trade on Friday against a basket of major rivals, resuming losses and approaching five-month lows, and on track for the second weekly loss in a row.
The losses are due to concerns about a potential US recession due to mounting trade tensions, while US inflation slowed down, boosting the odds of a Fed rate cut in June.
The Index
The dollar index fell 0.25% today to 103.57, with a session-high at 104.09.
On Thursday, the index dropped 0.25% to 103.57, with a session-high at 104.09.
On Thursday, the index rose 0.25% away from five-month lows at 103.22..
Weekly Trades
The dollar index is down 0.5% so far this week on track for the second weekly loss in a row.
Recession Concerns
Investors are worried about slower US growth after aggressive tariffs on major trade partners, while recent labor data and government layoffs raised more concerns.
US Treasury Secretary Scott Bessent said the economy might slow down as it shifts from government spending to private investments, and reaches a more sustainable balance.
He believes that some tariff levels will always be necessary to fix some economic imbalances around the world and secure more stable supply chains.
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.
US Rates
Recent data showed US consumer prices slowed down more than expected, bolstering the odds of a Fed rate cut in the summer.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 3%.
However, the odds of such a cut in June are much higher at 80%.
Gold climbs above $3000 for first time in history
Gold prices rose in European trade on Friday on track for the fourth straight profit, hitting a new record high above $3000.
The precious metal is on track for the largest weekly profit in 2025 on strong haven demand amid concerns about the global trade war, and with increasing odds of a Fed rate cut in June.
Prices
Gold prices rose 0.45% to $3001 an ounce, the highest on record, with a session-low at $2980.
On Thursday, gold rose 1.9%, the third profit in a row, marking the best profit in 2025 on haven demand.
Weekly Trades
Gold is up over 3% so far this week, on track for the second weekly profit in a row and the largest this year.
Trade Tensions
US President Donald Trump announced plans to escalate the global trade war through additional tariffs on European commodities.
The threat comes after Trump already imposed 25% tariffs on all steel and aluminum imports, triggering strong reactions from all major US partners.
European Commission President Ursula Von der Leyen announced plans to retaliate on a variety of US products starting April 2025, including bourbon and Harley Davidson products.
Trump reiterated his threats of reciprocal tariffs on the EU for any tariffs they announce.
US Rates
Recent data showed US consumer prices slowed down more than expected, bolstering the odds of a Fed rate cut in the summer.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 3%.
However, the odds of such a cut in June are much higher at 80%.
SPDR
Gold holdings at the SPDR Gold Trust rose 7.17 tons yesterday to a total of 905.81 tons, the highest since February 27.
Euro under pressure on mounting trade tensions
The euro fell in European trade on Friday against a basket of major rivals, extending losses for the third straight session against the dollar and moving away from a five-month high on profit-taking.
Euro faces negative pressures due to mounting EU-US trade tensions, following reciprocal tariffs with Donald Trump threatening even more duties on EU products.
The Price
The EUR/USD fell 0.2% today to $1.0830, with a session-high at $1.0858.
The pair fell 0.35% on Thursday on profit-taking away from five-month highs at $1.0947.
The pair was hurt by Donald Trump’s threats of even more tariffs on European products soon.
Trade Tensions
US President Donald Trump announced plans to escalate the global trade war through imposing additional tariffs on European commodities.
The threat comes after Trump already imposed 25% tariffs on all steel and aluminum imports, triggering strong reactions from all major US partners.
European Commission President Ursula Von der Leyen announced plans to retaliate on a variety of US products starting April 2025, including bourbon and Harley Davidson products.
Trump reiterated his threats of reciprocal tariffs on the EU for any tariffs they announce.
Lagarde
European Central Bank President Christine Lagarde cautioned that the eurozone is exposed to exceptional shocks due to the trade war, military conditions, and climate issues, threatening increasing inflation.