The U.S. dollar index ended near a three-year low, pressured by trade policy uncertainty, Trump’s criticism of the Fed, and cooling inflation. The euro briefly hit its highest since January 2022 before easing after a 25 bps ECB rate cut and weak growth outlook.
The pound extended gains as softer inflation boosted BoE rate cut expectations. The yen held near seven-month highs, with inflation on target and tariff risks clouding the BoJ outlook.
Gold closed at $3,226 after reaching a record high, supported by safe-haven demand and dovish Fed signals. Silver eased to $32.50 amid tariff concerns and Powell’s inflation remarks. Brent crude rose nearly 3% to $67, up 5% for the week, driven by Iran sanctions and OPEC+ supply cuts.
U.S. bond yields declined after the 90-day tariff pause. The 10-year fell to 4.33%, while the 2-year slipped to 3.80%. German 10-year yields dropped to 2.48% after the ECB decision.
China’s GDP grew 5.4% in Q1 2025, the fastest in 1.5 years, beating forecasts. Growth was driven by stimulus measures, strong March industrial output, retail gains, labor recovery, and pre-tariff export acceleration. Trade tensions with the U.S. remain a key risk, prompting expectations for further support.
UK inflation eased to 2.6% in March from 2.8%, below BoE estimates. Falls in recreation, transport, and fuel prices led the slowdown, though clothing and footwear rose. Monthly CPI was up 0.3%; core inflation dipped to 3.4% from 3.5%.
Eurozone inflation slowed to 2.2% in March from 2.3%. Core inflation dropped to 2.4%, the lowest since Oct 2021. Energy and service inflation eased, while food costs rose. Germany, Spain, and Belgium saw declines; Italy rose, France stayed flat.
US retail sales rose 1.4% in March, the strongest since Jan 2023, beating the 1.3% forecast. Auto sales jumped 5.3% ahead of tariffs. Ex-autos, sales rose 0.5%. Core retail sales, key for GDP, were up 0.4%.
The ECB cut all key rates by 25 bps in April: refinancing to 2.40%, deposit to 2.25%, lending to 2.65%. Easing inflation and wages justified the move. The ECB warned of trade-linked risks but gave no signal for more cuts.
Initial jobless claims fell 9,000 to 215,000—lowest in over two months. Continuing claims rose 41,000 to 1.885 million. Federal claims rose slightly to 548. DOGE-related layoffs may still be delayed by severance effects.
The index plunged to -26.4 in April from 12.5 in March (vs. expected 2), the worst since April 2023. New orders fell to -34.2, weakest since April 2020. Shipments and employment also dropped, with soft six-month outlooks.
The U.S. dollar index ended the week near a three-year low as trade tensions and soft inflation weighed on sentiment. Trump’s tariff actions and Fed criticism raised doubts about the dollar’s global status.
The euro peaked at its highest since January 2022 before easing to $1.1340 after the ECB cut rates by 25 basis points to 2.25% and warned of slower growth.
The British pound extended gains as inflation eased. Headline CPI fell to 2.6%, services to 4.7%. Markets now expect 86 basis points of BoE rate cuts this year.
The Japanese yen hovered near a seven-month high. Core inflation was steady at 3.2%. The BOJ is expected to hold rates at 0.5%, but U.S. tariffs threaten Japan’s export outlook.
Gold closed at $3,226 after hitting a record, driven by safe-haven demand and trade uncertainty. Trump delayed some tariffs but launched new probes into tech and pharmaceuticals. Powell signaled no near-term rate changes.
Silver eased to $32.50 after a strong rally, supported by trade fears and dollar weakness. China expressed limited interest in talks.
Brent crude rose 3% to $67, gaining 5% weekly on U.S. sanctions and OPEC+ cuts. But demand forecasts were lowered due to slowing U.S. and China growth.
U.S. stocks ended the week lower after a strong start on Trump’s temporary tariff delay. Sentiment weakened midweek amid renewed trade concerns and policy uncertainty. The Nasdaq fell 2%, the S&P 500 dropped 1.2%, and the Dow declined 2.5%.
Meta led losses, plunging 12.8% on a weak earnings outlook. Nvidia and Amazon dropped 7%, and Google slipped 3%. Apple and Netflix outperformed, each rising about 4% for the week.
Memorial Day (26-27 May, 2025)Trading conditions for certain instruments will be changed due to the Memorial Day Holiday on 26 and 27th May, 2025.
Detail Euro and Pound Rise on U.S. Fiscal Worries (05.22.2025)The euro and British pound extended their rallies on Thursday amid mounting concerns over the U.S. fiscal outlook, following Moody’s downgrade of the U.S. credit rating.
Detail Silver Holds Strong as Dollar Falters (05.21.2025)EUR/USD pushed higher toward 1.1330, lifted by a weaker dollar and cautious optimism around U.S. tariff de-escalation.
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