Daily Analysis 03/04/2025

• GBP/USD Price: GBP/USD attracts buyers for the second consecutive day, benefiting from broad USD weakness as the greenback slumps to a fresh year-to-date low.
• Trump’s Tariffs: The Trump administration’s newly announced tariffs were less aggressive than expected, easing market concerns after weeks of escalating trade war rhetoric.
• Fed Officials: Federal Reserve policymakers noted that uncertainty surrounding US trade policy could delay interest rate cuts, as inflation risks persist.
• US ADP Jobs Data: US ADP employment data showed a 155K increase in private-sector jobs for March, well above expectations of 105K and higher than the revised 84K in February.
• US Nonfarm Payrolls: While the UK economic calendar remains light, market participants are eyeing the upcoming US NFP report, which could influence Fed rate expectations and drive GBP/USD volatility.

Closing statement: GBP/USD remains supported by dollar weakness, but the US jobs report and Fed policy outlook will play a key role in determining further direction.

• XAU/USD Price: Gold prices surged to a new all-time high during the Asian session on Thursday, as investors sought safe-haven assets amid heightened global uncertainty.
• New Tariffs: The Trump administration announced a 10% baseline tariff on most US imports, with Chinese goods facing a total 54% tariff, escalating trade tensions.
• China's Retaliation: In response, China’s Commerce Ministry pledged strong countermeasures, fueling concerns of a full-scale trade war that could further support gold demand.
• Chinese Services PMI: Despite better-than-expected Caixin Services PMI data from China, gold prices continued their upward trajectory, indicating investor focus on trade risks.
• Fed Rate Cut: Investors are now pricing in a 70% chance that the Federal Reserve will cut rates in June, as Trump’s protectionist policies raise concerns about a potential US recession.

Closing statement: With intensifying trade tensions and growing Fed rate cut expectations, gold remains a favored safe-haven asset, with potential for further gains.

• Crude Oil Price: West Texas Intermediate (WTI) crude oil prices continue their slide from recent highs, with heavy selling pressure during the European session on Thursday.
• Trump’s Tariffs: The Trump administration imposed a 10% baseline tariff on all imports, with higher duties on key trade partners, disrupting global markets and weighing on oil demand sentiment.
• China Retaliation: In response, China’s Commerce Ministry vowed strong countermeasures, further escalating trade tensions that could dampen global economic activity and energy demand.
• EIA Inventory Report: The US Energy Information Administration (EIA) reported a much larger-than-expected build of 6.2 million barrels in crude stockpiles, adding to the downward pressure on oil.
• US Economic Data: Traders now turn to the US Weekly Jobless Claims and ISM Services PMI, which could provide additional insights into economic momentum and potential demand outlook.

Closing statement: With growing trade tensions and rising crude stockpiles, oil prices remain under pressure, with further downside risks in the near term.

• DAX Price: The DAX is set for major losses, with expectations of a drop below 22,000 points, marking its lowest level since mid-February as worries over Trump’s tariff package weigh on sentiment.
• Reciprocal Tariffs: President Trump announced broad and severe tariffs, stating that the U.S. will impose duties equal to half the combined tariff rates of other nations, aiming to "make America rich again."
• Wall Street Rebounds: U.S. equities recovered from early losses to close higher overnight, as investors awaited Trump’s trade policy announcement and reacted to stronger-than-expected economic data.
• US Economic Data: The private sector added more jobs than forecast in March, while new orders for manufacturing goods rose sharply in February, signaling economic resilience despite tariff concerns.
• European PMI Data: Traders now await final March services and composite PMIs for major European economies, which could offer insights into private sector growth trends. Preliminary data indicated an acceleration in Germany and the broader Eurozone.

Closing statement: While European economic data shows signs of strength, trade war fears continue to overshadow investor sentiment, putting the DAX under renewed downside pressure.