The EUR advanced by 0.09% against the USD this week, as a combination of weaker-than-expected Eurozone data and solid US economic performance weighed on the pair.

In the Eurozone, the HCOB manufacturing PMI rose for the first time in two years, indicating signs of recovery in the manufacturing sector. However, the HCOB services PMI unexpectedly declined to its lowest level in four months, raising concerns about weakness in the broader economy.

On the other hand, US economic indicators outperformed expectations, boosting the dollar. Annualized GDP grew 2.4% in Q4 2024, surpassing forecasts of 2.3% but slowing from 3.1% in the previous quarter. Additionally, pending home sales surged in February. The Kansas Fed manufacturing activity index climbed back into positive territory in March, indicating strengthening industrial activity.

The USD closed 0.50% higher against the JPY this week, supported by strong US economic data.

The Japanese Yen initially gained traction as Tokyo inflation data reinforced expectations of further Bank of Japan (BoJ) tightening. However, this strength was offset by weaker domestic data, including a slowdown in Japan’s services PMI in March, signaling weakening momentum. Additionally, the Jibin Bank manufacturing PMI unexpectedly dropped, indicating continued contraction. Meanwhile, Japan’s national CPI rose in February but slowed from 4.0%, suggesting easing inflation.

Conversely, in the US, annualized Q4 GDP grew 2.4%, exceeding expectations, while pending home sales surged 2.0% in February, reflecting housing market resilience. Initial jobless claims declined to 224K, reinforcing labor market optimism. Additionally, the US trade deficit narrowed, boosting economic confidence.

The GBP advanced by 0.18% against the USD this week, driven by weaker-than-expected UK CPI data and a reduction in welfare benefits announced by Chancellor Reeves in the Spring Statement.

In the UK, Q4 2024 GDP growth met expectations, while services PMI exceeded forecasts in March. Retail sales rose unexpectedly in February, but inflation slowed, and manufacturing PMI declined in March.

On the flipside, the US manufacturing PMI fell sharply in March, and consumer confidence hit a four-year low. However, Q4 2024 GDP surpassed expectations, durable goods orders rebounded in February, and services PMI exceeded projections in March.

Despite GBP’s gains, further upside in GBP/USD may be limited due to rising risk-off sentiment amid escalating US trade policies.

The GBP closed higher by 0.63% against the JPY this week, supported by cooler-than-expected UK Consumer Price Index (CPI) data for February and market expectations surrounding the Bank of Japan’s (BoJ) policy stance.

In the UK, GDP growth for Q4 2024 met expectations, while services PMI exceeded forecasts in March. Additionally, retail sales saw an unexpected increase in February, though inflation advanced at a slower-than-expected pace.

In Japan, Jibin Bank’s manufacturing PMI declined unexpectedly in March, while services PMI also weakened. Meanwhile, Tokyo’s CPI rose in March, and the leading economic index remained unchanged in January.

On the monetary policy front, BoJ Governor Kazuo Ueda indicated that further interest rate hikes remain possible, provided economic and price trends align with forecasts. 

Oil prices climbed last week, after US President Trump announced that he would be placing a 25% tariff on all imports from any country that buys oil or gas from Venezuela, raising concerns over potential supply disruptions. Additionally, the US Energy Information Administration (EIA) reported that crude oil inventories fell by 3.3mn bls to 433.60mn bls in the week ended 21 March 2025, reinforcing worries over tighter supply.

Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) are likely to proceed with its planned hike in oil output for a second consecutive month in May. The OPEC+ is scheduled to raise output by 135,000 barrels per day in May. This would be the second monthly increase under a plan to unwind some of the millions of barrels per day of cuts the group has had in place since 2022.

Gold prices rose last week, as rising concerns over US tariff policies and their potential inflationary impacts boosted demand for the haven metal. US President Donald Trump unveiled a 25% tariff on imported cars and light trucks starting 02 April 2025, widening the global trade war. These tariffs are expected to exacerbate inflationary pressures, disrupt global supply chains, and potentially slow economic growth, further boosting driving demand the yellow metal.

Moreover, investors await the US personal consumption expenditures (PCE) data for further direction on the Federal Reserve’s (Fed) path of interest rate cuts. Also, the bullion is seeing support from strong central bank inflows and ETF demand.

Bitcoin prices fell last week, as the US notable progress on Cryptocurrency regulation boosted investor risk appetite. The Digital Asset Market Structure and Investor Protection Act advanced through the Congress with bipartisan support. The bill is expected to provide clear regulatory framework for cryptocurrency and tax guidelines. However, gains were limited, as robust US jobless claims data reinforced expectations that the Federal Reserve would maintain its restrictive monetary policy stance, denting demand for the risk asset.

In major news, the BlackRock, the world’s largest asset manager, launched a Bitcoin exchange-traded product (ETP) on multiple European stock exchanges. Separately, news reports indicate that, Coinbase Global Inc. is in advanced discussions to acquire crypto derivatives exchange Deri bit.