Morning Market Review for 04.03.2025

EUR/USD

The European currency is showing a slight decline in the EUR/USD pair during the Asian session, correcting after a noticeable rise the day before, which allowed the instrument to quickly recover some of the losses incurred last week. Quotes are testing 1.0475 for a breakdown, while traders are in no hurry to open new positions in anticipation of the emergence of new movement drivers. In particular, tomorrow, at 11:00 (GMT+2), the eurozone will publish February statistics on business activity from S&P Global: the Services PMI may be fixed at 50.7 points. In addition, January data on production inflation will hit the market at 12:00 (GMT+2): forecasts suggest a slight slowdown in the Producer Price Index from 0.4% to 0.3%. On Thursday, at 15:15 (GMT+2), the results of the European Central Bank (ECB) meeting will be known: the regulator is expected to cut the interest rate by another 25 basis points to 2.50%, and also speak in favor of possible easing of monetary policy in the near future. At the same time, analysts note that some contradictions are arising within the Bank. In particular, the President of the Bundesbank, Joachim Nagel, noted that it is better not to rush into further reductions in borrowing costs now, but to wait for some clarification of the situation. Market participants are assessing a block of statistics that appeared on Monday: the Consumer Price Index for the eurozone as a whole adjusted in annual terms from 2.5% to 2.4%, which was slightly higher than the market expectations of 2.3%, and in monthly terms it showed growth of 0.5% after –0.3% in the previous month. The Core Consumer Price Index adjusted from 2.7% to 2.6% and added 0.6% after –0.9%, respectively. Meanwhile, statistics from the US were mixed: the ISM Manufacturing Business Activity Index fell from 50.9 points to 50.3 points in February, with expectations of 50.5 points, while the S&P Global Manufacturing Business Activity Index rose from 51.6 points to 52.7 points.

GBP/USD

The British pound is trading with near-zero dynamics during the morning session, consolidating near local highs from December 18 and a strong resistance level of 1.2700. The instrument received some support the day before from macroeconomic data from the UK. Thus, Net Lending to Individuals in January increased from 4.4 billion pounds to 5.9 billion pounds, against a forecast of 4.7 billion pounds, and Consumer Credit increased from 1.062 billion pounds to 1.740 billion pounds. At the same time, Mortgage Approvals decreased from 66.50 thousand to 66.19 thousand, while traders were counting on 65.65 thousand. Markets also took note of the increase in the S&P Global Manufacturing PMI in February from 46.4 points to 46.9 points. Meanwhile, statistics from the US were mixed: the ISM Manufacturing PMI fell from 50.9 points to 50.3 points in February, with expectations of 50.5 points, the Manufacturing Employment Index fell from 50.3 points to 47.6 points, and the New Orders Index fell from 55.1 points to 48.6 points. In addition, Construction Spending fell by 0.2% in January after growing by 0.5% in December last year, while experts expected zero dynamics. The February data on the Retail Price Index from the British Retail Consortium (BRC) is putting pressure on the trading instrument quotes today: in February, the value fell by another 0.7%. Markets are focusing on more global factors, including the introduction of increased 25.0% import tariffs by the United States on goods from Canada and Mexico, as well as 10.0% on imports from China.

Learn More

Publication date:

04 March 2025 - 12:28 (GMT)

The Australian dollar is showing a moderate decline in the AUD/USD pair during the Asian session, returning to the "bearish" dynamics that began to form the week before last. The instrument is testing 0.6200 for a breakdown, updating local lows from February 4. At the same time, the markets have shown virtually no reaction to the publication of the minutes of the February meeting of the Reserve Bank of Australia (RBA), which noted that the cut in the interest rate by 25 basis points to 4.10% does not impose any obligations on the regulator to necessarily ease monetary policy in the future. The regulator also expressed doubts that inflation could be returned to target levels simply by reducing the cost of borrowing. It is also clear that the RBA is in no hurry to change monetary parameters amid the risks associated with the possible introduction of higher import duties by the US. In particular, tariffs of 25.0% on goods from Canada and Mexico should come into effect today. President Donald Trump also announced a 10.0% restriction on Chinese imports. In addition, duties on the import of steel and aluminum into the United States were announced. The January Retail Sales data released today in Australia did not provide any support to the instrument: sales volume added 0.3% after –0.1% in the previous month. In turn, tomorrow, at 15:15 (GMT+2), in the US, a report from Automatic Data Processing (ADP) on the level of employment in the private sector will be presented: forecasts suggest a reduction from 183.0 thousand to 140.0 thousand.

The US dollar is mixed in USD/JPY trading in Asia, holding near 149.30: during the day, the instrument managed to update its local lows of February 25, but now the "bulls" have regained their positions. Macroeconomic data from Japan, published today, played a significant role in the development of the corrective growth: thus, the Unemployment Rate in January increased from 2.4% to 2.5%, Capital Spending in the fourth quarter of 2024 decreased by 0.2% after increasing by 8.1% in the previous period with a forecast of 4.9%, and the Consumer Confidence index in February fell from 35.2 points to 35.0 points, while experts expected 35.7 points. Meanwhile, traders are in no hurry to open new positions on the American currency ahead of the publication of statistics on the labor market. Tomorrow, at 15:15 (GMT+2), the Automatic Data Processing (ADP) report on private sector employment will be released: forecasts suggest a decrease from 183.0 thousand to 140.0 thousand, which could put pressure on the US Federal Reserve to further reduce borrowing costs. Markets are still pricing in only two interest rate adjustments of –25 basis points in the second half of 2025. On Friday, at 15:30 (GMT+2), the final data from the Labor Department will be released: a moderate increase in Nonfarm Payrolls is expected in February from 143.0 thousand to 153.0 thousand, while Average Hourly Earnings may amount to 4.1% in annual terms and slow down from 0.5% to 0.3% in the monthly terms. The Unemployment Rate is likely to remain unchanged at 4.0%.

The XAU/USD pair is consolidating near 2890.00 during the morning session, correcting after the growth the day before, which was largely due to the publication of macroeconomic statistics from the US. The ISM Manufacturing PMI fell from 50.9 points to 50.3 points in February, with expectations of 50.5 points, the Manufacturing Employment Index fell from 50.3 points to 47.6 points, and the New Orders Index fell from 55.1 points to 48.6 points. In addition, Construction Spending fell by 0.2% in January after growing by 0.5% in December last year, while experts expected zero dynamics. Traders are also in no rush to open new positions ahead of the entry into force of increased import duties by the United States against goods from Canada and Mexico, which have been delayed for a month. Canadian Prime Minister Justin Trudeau has pledged to impose retaliatory tariffs of 25.0% on 155.0 billion dollars’ worth of American goods. Tariffs on goods worth 30.0 billion dollars will be imposed immediately, with the remaining 125.0 billion dollars imposed gradually over 21 days. In addition, the White House administration announced additional import duties of 10.0% on a number of Chinese goods.