Market Analysis: What You Need to Know on Thursday, April 3
US Dollar Index
The Greenback traded on the back foot on Wednesday, receding markedly against the backdrop of increasing prudence ahead of President Trump’s announcements on reciprocal tariffs. The US Dollar Index (DXY) broke below the 104.00 region amid a pronounced pullback and a marginal bounce in US yields across the curve.
EUR/USD
EUR/USD gathered steam and advanced past the 1.0870 barrier, leaving behind two daily pullbacks in a row. The final HCOB Services PMI in Germany and the euro area will be published, seconded by Producer Prices in the bloc, the ECB Accounts, and speeches by the ECB’s De Guindos and Schnabel.
GBP/USD
GBP/USD added to Tuesday’s small gains and retested the 1.2980 region, or four-day highs. The final S&P Global Services PMI will be the sole data release across the Channel.
USD/JPY
USD/JPY navigated with decent gains, regaining the 150.00 hurdle amid markets’ cautious stance prior to Trump’s announcements. The weekly Foreign Bond Investment and the final Jibun Bank Services PMI are expected on the Japanese calendar.
AUD/USD
AUD/USD advanced to weekly peaks north of the key 0.6300 hurdle, building on Tuesday’s gains. The final S&P Global Services PMI is due, seconded by Balance of Trade results and the RBA’s Financial Stability Report (FSR).
Commodity Prices
Prices of WTI traded in an upbeat tone, flirting with the $72.00 mark per barrel despite a large build in US inventories and rising caution ahead of Trump’s “Liberation Day” announcements. Prices of Gold regained composure, leaving behind Tuesday’s decline and keeping the trade near recent record peaks past the $3,100 mark per troy ounce. Silver prices advanced modestly, retesting the area above the key $34.00 mark per ounce following three daily drops in a row.
Upcoming Economic Data
- Balance of Trade results
- Weekly Initial Jobless Claims
- Final S&P Global Services PMI
- Challenger Jon Cuts
- ISM Services PMI
- Speeches by the Fed’s Cook and Jefferson
Analysis:
The financial markets are currently experiencing volatility as investors await President Trump’s announcements on reciprocal tariffs. The fluctuation in the US Dollar Index and major currency pairs like EUR/USD, GBP/USD, USD/JPY, and AUD/USD reflect this uncertainty. Commodity prices, particularly WTI, Gold, and Silver, are also reacting to market sentiment.
Key economic data releases, such as Balance of Trade results, Initial Jobless Claims, and various PMI reports, will provide further insight into the health of the global economy. Investors should closely monitor these indicators to make informed decisions.
Overall, staying informed about market developments and upcoming economic data is crucial for investors to navigate the current financial landscape effectively and protect their financial future.