Weekly Analysis

The US dollar ended the week higher, supported by the Federal Reserve’s upward revision to inflation forecasts. However, Thursday brought a slight pullback as concerns over economic growth and proposed tariffs from President Trump weighed on sentiment.

The US dollar index rose toward 104 as the Fed signaled two cuts this year but saw no urgency. Powell downplayed Trump’s tariffs. The euro eased after Lagarde warned of weaker growth. The pound dipped below $1.30 as the BoE stayed cautious. The yen weakened to 149 as inflation eased but stayed above expectations.

The dollar index held steady as markets balanced trade war concerns against weak consumer confidence. Optimism improved following progress in averting a U.S. government shutdown.

The Dollar Index extended its decline for a fifth consecutive session, reaching 103.7, its lowest level in four months, as tariff uncertainty and economic concerns weighed on sentiment. Traders now focus on the upcoming jobs report for insights into the labor market.

The US dollar ended the week on a strong note, buoyed by President Trump’s confirmation of 25% tariffs on Mexico and Canada.

The dollar index fell as weak US PMI data and easing trade fears raised Fed rate cut expectations. However, FOMC minutes signaled caution. The euro stayed below $1.05, with investors eyeing Germany's election and weak Eurozone PMI data. Trump's planned 25% tariffs on imports from April 2 added pressure on European automakers.

The dollar fell sharply after U.S. retail sales dropped 0.9%, far below expectations, signaling weaker consumer spending. While CPI and PPI exceeded forecasts, cooling PPI components reinforced the Fed’s cautious stance on rate cuts. The euro climbed toward $1.05, supported by weak U.S. retail sales and rate-cut expectations, while the British pound hit $1.2585 after Trump delayed tariffs, easing trade tensions. The Bank of England cut rates to 4.5% and lowered its 2025 growth forecast to 0.

The dollar index fell after weak jobs data, raising doubts about Fed policy. Treasury Secretary Bessent reaffirmed support for a strong dollar and denied Trump is pressuring the Fed for cuts. Markets still expect two 25bps cuts this year. The euro rose above $1.04 as Trump’s tariffs and China’s retaliation fueled uncertainty. The ECB cut rates and may ease further, with markets expecting the deposit rate to drop to 1.87% by December. The pound ended higher despite the BoE’s 25bps cut, with traders pricing in three more cuts this year.