Trump has changed his face many times and the US dollar index continues to fall

On March 7, during the European session on Friday, the US dollar continued to decline slightly and is expected to hit its largest single-week decline since November 2022. In the second half of the day, market participants will closely monitor U.S. employment data for February, including non-farm employment, unemployment rate and wage inflation data.

The dollar continued to weaken despite slower speeds after suffering a heavy blow against major currencies in the first half of last week. The market expects non-farm employment to increase by 160,000 in February, following the previous year’s 143,000. Later in the U.S. meeting, Fed Chairman Jerome Powell and a number of other policy makers will speak before the Fed lockdown begins on Saturday. As of press time, the U.S. dollar index fluctuated in the negative area below 104.00, down about 3.4% per week.

Data from China showed that exports rose 2.3% year-on-year in February, while imports fell 8.4% during the same period. In turn, China's trade surplus expanded from $104.84 billion in January to $170.51 billion.

Trump suspended the weekly 25% tariffs imposed on most of Canada and Mexico on Thursday, the latest twist in his trade policy, a move that hurts risk sentiment on Friday, and investors have also sold risk currencies such as the dollar.

In the bond market, signs of European bond selling triggered by Germany's large-scale spending plans began to ease, and German and French government bond futures rose. Japanese government bonds continued to decline, but the degree was reduced from the previous trading day.

10-year Japanese Government Bond (JGB) yield rose by 1.5 basis pointsto 1.53%, the highest level since June 2009. The 20-year yield increased by 2 basis points to a 16-year high of 2.22%.

Basic Forex Market Market:

The European Central Bank (ECB) announced on Thursday that it would cut key interest rates by 25 basis points (bps) as expected. In its policy statement, the ECB reiterated that future interest rate decisions will be based on an assessment of the inflation outlook based on upcoming economic and financial data, potential inflation dynamics and monetary policy transmission. avatradescn.commenting on the policy outlook, ECB President Christine Lagarde pointed out that the ECB will continue to rely on data and they will make decisions based on successive meetings. The euro/dollar closed slightly lower on Thursday, but began a slight increase above 1.0800 early on Friday. Meanwhile, data from Germany showed that factory orders contracted 7% month-on-month in January.

Stat Canada will release employment data for February later that day. Investors expect unemployment to rise to 6.7% from 6.6% in January. After three consecutive days of declines, the USD/CAD remained near 1.4300 in early trading on Friday, in a consolidation phase.

The GBP/USD fluctuated narrowly around 1.2900 on Friday after hitting a few months above 1.2920 on Thursday.

The US dollar/JPY continued to be under bearish pressure on Friday and fell to 147.50. Japanese Finance Minister Katsushiro Kato said earlier on Friday that the market had experienced one-sided and rapid volatility, adding that he would take appropriate action to prevent excessive volatility in foreign exchange.

Bulle market fundamentals:

In the avatradescn.commodity market, Brent crude oil futures rose 0.1% to $69.53 per barrel, while US WTI crude oil futures rose 0.03% to $66.3 per barrelhttps://avatradescn.com8 US dollars.

Gold prices rose due to uncertainty, approaching historical highs, with trading around $2,915.

Analysis of major currency trends:

Euro: Euro/USD lost its upward momentum after hitting 1.0853, and intraday bias first became neutral. The downside space of the retracement should be controlled above the 554-hour EMA (now 1.0593) to bring another rebound. Above 1.0853, it will resume the rise from 1.0176 to 161.8%, and then the forecast from 1.0358 to 1.0932 is 1.0176 to 1.0531.

GBP:GBP/USD at 1.34The 61.8% retracement level of 33 to 1.2099 lost momentum before 1.2923, and the intraday bias first became neutral. The downside space of the retracement should be converted to support by the 1.2715 resistance level to bring another rebound. Continuous breakthroughs of 1.2923 will pave the way for a rebound to the high of 1.3433.

JPY: The intraday bias of the US dollar/JPY is still on a downward trend. From 158.86, as the third line of the correction model from the high of 161.94, a 61.8% retracement level of 146.32 is underway from 139.57 to 158.86. Continuous breakthroughs will pave the way for a decline to the low of 139.57. On the plus side, the small resistance at 149.32 will turn the intraday bias into neutral and consolidate again, then fall again.

The above content is all about "[Aihua Foreign Exchange Decision Analysis]: Trump has changed his face many times and the US dollar index continues to fall". It is carefully avatradescn.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!

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