This week, the U.S. dollar (USD) experienced some stagnation, primarily due to ongoing geopolitical tensions and shifts in U.S. trade policies. Following the Supreme Court’s declaration that the Trump administration’s tariffs were illegal, the former administration imposed new tariffs in response. Interestingly, despite the release of better-than-expected producer price index (PPI) figures, the dollar didn’t see a significant bounce back.
The US dollar index (DXY) closed the week with modest activity, hovering around 97.60, which was a slight decrease of about 0.20% for the day. Traders seemed to be on edge due to the uncertainties regarding trade and geopolitical issues.
Currently, EUR/USD is trading nearby 1.1810, recovering some ground during U.S. trading hours. This uptick followed the announcement that Germany’s preliminary Harmonized Index of Consumer Prices (HICP) for February was lower than anticipated, dropping from 2.1% to 2% year-on-year and from 0.5% to 0.4% month-on-month. Investors also responded positively to Christine Lagarde’s comments in the European Parliament, where she suggested that food price inflation pressures would gradually ease by 2026, with inflation likely returning to 2% over time. She also confirmed her commitment to her role, putting speculation about her potential resignation to rest.
For GBP/USD, it’s trading around the 1.3470 mark, displaying signs of recovery after recently nearing a one-month low. In another context, Bank of England (BoE) Governor Andrew Bailey indicated that there might be an opportunity for interest rate cuts, given expectations that inflation will revert to the 2% target.
Meanwhile, USD/JPY is hovering around the 156.00 range, showing resilience after bouncing back from earlier losses. February’s consumer price index (CPI) in Tokyo increased by 1.6% year-on-year, though the figure excluding fresh food fell below the Bank of Japan’s (BOJ) 2% goal for the first time since 2024.
AUD/USD is currently near 0.7120, displaying gains after reversing previous losses. The market is now paying close attention to Australia’s TD-MI inflation gauge set to release on Monday.
USD/CAD is trading around 1.3630, reaching a nearly two-week low as investors process recent data from both the United States and Canada. Statistics Canada reported a 0.6% annualized contraction in GDP during the fourth quarter, following a revised growth of 2.4% in the previous quarter.
Gold is now trading at approximately $5,260, achieving a one-month high in light of ongoing geopolitical concerns. It’s on a path to reclaim its all-time high of $5,598 reached earlier this year.
Looking Ahead: Economic Insights
Upcoming Events:
Monday, March 2nd:
- Mr. Elderson from the ECB.
- Mr. Nagel from the ECB.
- ECB President Lagarde.
- BOE Lumsden.
- RBA Block Governor.
Tuesday, March 3rd:
- Bank of Japan Governor Ueda
- Mr. Williams from the Fed.
- ECB’s Slypen.
- Mr. Kocher from the ECB.
- Mr. Kashkari from the Federal Reserve.
Wednesday, March 4th:
- ECB Cipollone.
- Central Bank Governor Macklem.
- Mr. Deguindos from the ECB.
Thursday, March 5th:
- Mr. Deguindos from the ECB.
- Mr. Kocher from the ECB.
- ECB President Lagarde.
Friday, March 6th:
- ECB Cipollone.
- Fed Daily.
- Fed Hammack.
- Mr. Paulson from the Federal Reserve.
Central Bank Meetings and Key Data Releases
Monday, March 2nd:
- Australia’s TD-MI inflation gauge.
- China’s February manufacturing PMI.
- Germany’s January retail sales.
- Switzerland’s January retail sales.
- Spain’s February HCOB Manufacturing PMI.
- Italy’s February HCOB Manufacturing PMI.
- Germany’s February HCOB Manufacturing PMI.
- February S&P World Manufacturing PMI for Canada.
- U.S. February ISM Manufacturing Employment Index.
- U.S. February ISM Manufacturing New Orders Index.
- U.S. February ISM Manufacturing PMI.
- U.S. February ISM Manufacturing Price Payment.
- New Zealand’s January Building Permit.
- Japan’s January unemployment rate.
Tuesday, March 3rd:
- Building permits in Australia for January.
- HICP in the euro area.
- Italy’s latest CPI for February.
- Australia’s AiG Industry Index.
- February S&P Global Composite PMI for Australia.
- Australia’s February Global Services PMI.
Wednesday, March 4th:
- Australia’s fourth quarter GDP figures.
- China’s February NBS Manufacturing PMI.
- China’s February Service PMI.
- Swiss February CPI data.
- Spain’s February HCOB Manufacturing PMI.
- Germany’s February HCOB Manufacturing PMI.
- Eurozone February HCOB PMI.
- Eurozone January PPI.
- Italy’s fourth quarter GDP data.
- Changes in ADP employment in the U.S.
- U.S. S&P February World Composite PMI.
- U.S. February ISM Services Employment Index.
- U.S. February ISM Services New Orders Index.
- U.S. February ISM Services PMI.
- U.S. February ISM Services Price Payment.
- U.S. Federal Reserve Beige Book.
Thursday, March 5th:
- Australia’s trade balance for January.
- Eurozone January retail sales data.
- U.S. February Challenger job cuts statistics.
- Number of new unemployment insurance claims in the U.S.
- U.S. flash non-agricultural productivity report.
- U.S. unit labor costs for the fourth quarter.
Friday, March 6th:
- Germany’s factory orders for January.
- Employment changes in the euro area for the fourth quarter.
- Eurozone GDP (QoQ) for Q4.
- Average hourly wage in the U.S. for February.
- U.S. labor force participation rate for February.
- U.S. non-farm payroll data for February.
- U.S. January retail sales figures.
- February U6 underemployment rate in the U.S.
- U.S. unemployment rate for February.
- Canada’s February Ivy PMI.
