The U.S. dollar index fell to 99, a near three-year low, as trade tensions intensified. China hiked tariffs on U.S. goods to 125% after Washington raised rates to 145% on Chinese imports. The euro jumped above $1.14, up 3.5% for the week, while the pound rose past $1.30 on strong UK GDP. The yen also gained on safe-haven demand and a Treasurie selloff.
Gold hit a record above $3,250, driven by safe-haven demand and a weaker dollar after China raised tariffs to 125% in response to U.S. hikes. Silver climbed past $31.20 for a third day, supported by soft inflation and Fed rate cut bets. Brent crude rose 2.3% to $64.70 on U.S.-Iran tensions but ended the week lower amid demand concerns and OPEC+ output hikes.
Bond selling resumed this week. U.S. 10-year yields rose to 4.48%, while 2-year yields neared 3.96%. Japan’s 10-year yields rebounded to 1.30%, reversing last week’s decline.
The RBNZ cut its official cash rate by 25bps to 3.50% in April 2025, the lowest since October 2022 and in line with expectations. This marks 200bps of cuts since August amid global trade war concerns. Inflation remains within the 1–3% target, with core inflation on track. Q4 2024 inflation was 2.2%, the lowest since Q1 2021, and GDP grew 0.7% after two quarterly declines.
US annual inflation fell to 2.4% in March, the lowest since September, down from 2.8% and below 2.6% expectations. Gasoline prices dropped 9.8%, fuel oil 7.6%, while natural gas rose 9.4%. Housing inflation slowed (4% vs 4.2%), used cars (0.6% vs 0.8%), and transport (3.1% vs 6%). Food inflation rose to 3%. Monthly CPI fell 0.1% (vs expected +0.1%). Core inflation dropped to 2.8%, the lowest since March 2021, with monthly core CPI up just 0.1% (vs 0.3%).
Initial claims rose by 4,000 to 223,000 in early April, matching expectations. Continuing claims fell by 43,000 to 1.85 million, beating the forecast of 1.88 million. Federal program claims rose by 56 to 508, the lowest under Trump’s presidency. Many DOGE layoffs came with severance packages, delaying filings.
UK GDP grew 0.1% q/q in Q4 2024, after flat Q3. Services rose 0.1%, construction 0.3%, and industrial output fell 0.4% (vs -0.8%), mainly from basic metals and transport equipment. Household spending was revised up to 0.1%, and government spending rose 0.5%, driven by public services.
US PPI dropped 0.4% in March, the first decline since Oct 2023, against expectations of +0.3%. Goods prices fell 0.9% due to an 11% gasoline drop; services fell 0.2% led by a 1.3% fall in machinery and vehicle wholesaling. Core PPI rose 0.1% (vs 0.3%), and annual core slowed to 3.3% from 3.5%. Headline PPI rose 2.7% y/y, a six-month low (vs 3.3% expected).
Germany’s inflation eased to 2.2% in March (vs 2.3%), the slowest since Nov. Services inflation fell to 3.5% (from 3.8%) and energy prices dropped 2.8%. Food inflation rose to 3% from 2.4%. Core inflation fell to 2.6%, the lowest since June 2021. Monthly CPI rose 0.3%. EU-harmonized inflation fell to 2.3% y/y, with a 0.4% monthly rise.
The USD index fell to 99, its lowest in nearly 3 years after China raised tariffs on US goods to 125% in retaliation for the US’s 145% hike. The dollar lost 2% on the week. The euro rose above $1.14 for the first time since Jan 2022, up over 3.5%. The pound climbed past $1.30, near its 6-month high, after a surprise 0.5% UK GDP rise in February. Rate cut expectations for the BoE were revised down to 66bps from 79bps. The yen strengthened to its highest since Sept 2024 on safe-haven demand and a US Treasuries selloff. Rising US-China tensions continue to shake global currency and asset markets.
Gold surged above $3,250 on Friday, hitting a new record as safe-haven demand soared amid rising US-China trade tensions and a weaker dollar. China raised tariffs on US goods to 125%, following the US’s 145% hike, affecting nearly $700B in trade. Silver climbed above $31.20 for a third session, supported by dollar weakness and soft US core inflation, which supported Fed rate cut expectations.
Brent crude rose 2.3% to $64.70 on Friday after the US threatened to block Iranian oil exports, but trade tensions and OPEC+’s surprise output increase pressured demand outlooks. Brent still ended the week down 1%.
US stocks rallied last week. The Nasdaq jumped 7%, the S&P 500 gained 6%, and the Dow rose 5%. Apple advanced 6%, while Nvidia soared 17%, leading the tech-driven recovery.
The U.S. dollar index dropped below 100 on Wednesday, nearing a three-year low, as investors awaited remarks from Fed Chair Jerome Powell.
Detail Tariff Delay Calms Markets; Focus Turns to Powell (04.15.2025)The U.S. dollar index stabilized near 100 on Tuesday after a three-day slump, as the White House paused some tech tariffs and hinted at a delay in auto levies.
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U.S. Producer Prices Fall in MarchFactory gate prices in the United States dropped in March, defying expectations and signaling a potential softening in inflation pressures.
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