The global financial markets are poised for significant movements as attention shifts to pivotal macroeconomic data releases from the United States and Europe. On Thursday, the European Central Bank (ECB) will publish the Monetary Policy Meeting Accounts, offering insights into the future direction of monetary policy. Meanwhile, traders are keenly awaiting key US economic data, including the much-anticipated fourth quarter Gross Domestic Product (GDP) growth revision from the US Bureau of Economic Analysis. The week also brings critical figures such as Durable Goods Orders, Pending Home Sales for January, and the weekly Initial Jobless Claims report.
In a noteworthy development, US President Donald Trump continues to send mixed signals regarding tariffs, particularly focusing on Mexico, China, and Canada. These three nations collectively accounted for 42% of total US imports in 2024, highlighting their importance in US trade policy considerations. Trump's announcement that tariffs on Canada and Mexico will take effect on April 2nd has added to the uncertainty surrounding trade relations.
In European trading on Thursday, the GBP/USD pair remains under pressure, hovering below the 1.2700 mark. Simultaneously, USD/JPY is struggling to find direction, moving sideways below 149.50 for the second consecutive day. The US Dollar has shown signs of recovery, buoyed by Trump's conflicting messages on tariffs and trade policies. The Dollar's strength is particularly evident against the New Zealand Dollar, where it emerged as the strongest currency.
Gold prices are experiencing a downward drift, influenced by an uptick in US bond yields that have enabled the US Dollar to recover from a multi-month low. The XAU/USD pair is expected to benefit from ongoing uncertainties related to Trump's tariff plans and fears of a potential trade war.
Inflation trends are also under scrutiny, with indications that inflation may have eased in February, especially in France due to significant reductions in regulated electricity prices. These developments will be closely monitored as the European Commission releases Consumer Confidence, Business Climate, and Economic Sentiment Indicator data for February.
As financial markets navigate through these key data releases and geopolitical developments, traders are looking to the ECB Minutes, the US GDP revision, and Trump's speech for further impetus. The outcomes of these events will likely shape market sentiment and determine the direction of major currency pairs in the coming days.