Daily Analysis 24/03/2025

• GBP/USD Price: GBP/USD shows resilience above the 1.2900 level, attracting dip-buyers during Monday’s European session despite recent downward pressure.
• BoE Rate: The Bank of England (BoE) kept its benchmark rate at 4.5% on Thursday as expected, leading to a decline in the Pound due to lingering uncertainty over future rate cuts.
• Fed’s Goolsbee: Chicago Fed President Austan Goolsbee stated that inflation and rate uncertainty require a cautious approach, reinforcing a wait-and-see stance on monetary policy.
• CB Speak: Speeches from influential FOMC members and comments from BoE Governor Andrew Bailey are expected to generate near-term trading opportunities in GBP/USD.
• UK CPI Inflation: Investors await the release of the UK Consumer Price Index (CPI) data for February on Wednesday for clues on inflation trends and potential BoE policy adjustments.

Closing statement: GBP/USD remains supported above 1.2900, but upcoming FOMC speeches and UK inflation data will be key in setting the near-term trend.

• XAU/USD Price: Gold prices remain under pressure for the third consecutive day on Monday as a modest rebound in the US Dollar (USD) and a positive risk tone weigh on the safe-haven asset.
• White House Plans: The Wall Street Journal reported that the White House is expected to narrow its list of tariffs set for April 2, omitting some industry-specific tariffs while targeting reciprocal tariffs on key trading partners.
• Fed’s Williams: New York Fed President John Williams reinforced that the Fed’s 2% inflation target remains firm, stating that the current modestly restrictive policy stance is appropriate amid economic uncertainty.
• Peace Talks: Ukrainian Defense Minister Rustem Umerov described Sunday’s peace talks in Saudi Arabia as "productive." Attention now shifts to direct talks between Russian and US delegates scheduled for Monday.
• Middle East Tensions: The US military carried out fresh airstrikes on Yemen’s Saada province. Meanwhile, the Houthis claimed responsibility for attacks on a US aircraft carrier in the Red Sea and Israel’s Ben Gurion airport, raising geopolitical risks.

Closing statement: Gold remains vulnerable to downside pressure amid a stronger USD and easing trade tensions, but ongoing geopolitical uncertainty could limit losses.

• WTI Oil Price: West Texas Intermediate (WTI) Oil prices are down for the second consecutive session, trading near $68.40 per barrel during European hours on Monday, pressured by ongoing geopolitical tensions.
• Ceasefire Talks: Ceasefire negotiations continue, with President Trump pushing for an end to the three-year war. Ukraine’s Defense Minister Rustem Umerov highlighted efforts to protect energy and critical infrastructure.
• Middle East Conflict: Israel continues intense airstrikes in Gaza, killing Hamas leader Ismail Barhoum. Meanwhile, Iran-backed Houthis launched a ballistic missile at Israel on Sunday, which was intercepted by Israel's defense system.
• Iraq's Oil Production: Iraq aims to increase its Oil production capacity beyond 6 million barrels per day (bpd) by 2029, according to the state news agency. This could add further supply pressure in the medium term.
• Economic Data: Traders will monitor flash global PMIs for insights into global economic health, while the US Personal Consumption and Expenditure (PCE) Price Index on Friday will be pivotal for gauging future demand trends.

Closing statement: WTI remains pressured by geopolitical tensions and demand concerns, with traders closely watching US inflation data and ceasefire developments.

• DAX Price: The DAX fell 0.47% on Friday, adding to Thursday's 1.24% loss, closing at 22,892. Auto and tech sectors faced pressure due to concerns over potential US tariffs on autos, semiconductors, and pharmaceuticals.
• Fiscal Reform Bill: Germany’s Bundesrat approved a €500 billion infrastructure fund, allowing expanded government spending on defense and infrastructure. This is intended to revive the nation’s sluggish economy.
• German PMI: On Monday, Germany’s HCOB Manufacturing PMI is forecast to improve from 46.5 in February to 47.7 in March, while the HCOB Services PMI is expected to edge higher from 51.1 to 51.4.
• Trump's Tariff Comments: President Trump indicated a more flexible stance on reciprocal tariffs, easing concerns over stricter trade measures. This shift supported improved risk sentiment.
• US Services PMI: The upcoming S&P Global Services PMI release is projected to rise slightly from 51.0 in February to 51.2 in March, which could shape inflation and labor market outlooks.

Closing statement: The DAX faces ongoing pressure from trade risks, but improved German PMI expectations and easing tariff concerns may provide some support moving forward.