Market Overview
- The Australian Dollar (AUD) gained ground in Monday's Asian session, bolstered by positive Chinese economic data. The Reserve Bank of Australia (RBA) is expected to maintain interest rates amid global trade concerns.
- The Japanese Yen (JPY) strengthened for the second consecutive day against the US Dollar (USD), driven by firming Bank of Japan (BoJ) rate hike expectations and a risk-off mood.
- The British Pound Sterling (GBP) rose due to concerns about a US economic slowdown weakening the USD. UK Retail Sales unexpectedly increased in February, providing support for the GBP.
- Gold prices continued their rally, surging past $3,100 due to fears of a global trade war and stagflation in the US.
Fundamental Analysis
- China's Manufacturing Purchasing Managers' Index (PMI) increased to 50.5 in March, meeting market expectations. The Non-Manufacturing PMI also rose to 50.8.
- The People's Bank of China (PBOC) set the USD/CNY central rate for the trading session at 7.1782, aiming to maintain price stability and promote economic growth.
- US President Donald Trump threatened to impose secondary tariffs on buyers of Russian oil if he believes Russia is hindering efforts to end the war in Ukraine.
Technical Analysis
- EUR/USD: Trading positively for the third consecutive day, with USD weakening due to stagflation fears. Currently trading near 1.0835, lacking strong bullish momentum.
- GBP/USD: Rose to around 1.2965 in Monday's Asian session, gaining 0.21%. Analysts worry about the tariffs' impact on the US economy and the Federal Reserve's ability to reduce interest rates.
- USD/JPY: Faces downward pressure with technical analysis suggesting a potential decline below the 149.00 support level.
- Gold (XAU/USD): Price climbs to nearly $3,090 in Monday's early Asian session due to escalating global trade tensions and economic uncertainties.
Conclusion
- The market remains cautious due to global trade concerns and potential US tariffs. Safe-haven assets like Gold and JPY are benefiting from these uncertainties.
- Upcoming economic data releases and events in Germany, the EU, and the US will provide further insight into the economic landscape.
- Nonfarm Payrolls data can influence Federal Reserve decisions and impact the USD and Gold prices.
- Central banks are major Gold buyers, and Gold is inversely correlated with the USD and risk assets.
