In a dynamic start to 2025, consumer price inflation remained robust, yet showed signs of cooling in February. This moderation was evident as the core index, which measures underlying inflation trends excluding volatile categories, also eased during the month. Some sectors that experienced significant price hikes in January saw a reversal in February, contributing to the overall tempering of inflation pressures.
Investors, wary of these fluctuating conditions, refrained from taking large positions in February. The Forex market, known for its volatility, reflected these cautious sentiments. Adding to the complexity was the Trump administration's tariff policy, which continued to be a focal point of interest. Despite expectations, US inflation figures released in February did not fully encapsulate the effects of these tariffs, leaving markets on edge.
In contrast, the Eurozone painted a more optimistic picture. Sentix Investor Confidence data for March showed significant improvement, rising to -2.9 from a previous -12.7 in February. This boost in sentiment around the Euro was reflected in the Forex market, with the EUR/USD trading positively near 1.0850 on Monday. The strengthening confidence within the Eurozone provided a counterbalance to the cautious stance seen elsewhere.
Meanwhile, gold faced challenges, struggling to maintain its position and trading in the red near $2,900 on Monday. This movement highlighted the shifting nature of investor preferences amid changing economic indicators and geopolitical influences.