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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Avatradescn": The weak US economic data and the tension in the Middle East have helped to boost gold prices." Hope it will be helpful to you! The original content is as follows:
The dollar index slipped on Monday, hovering at a five-month low against the euro, driven by weak U.S. economic data. The market is concerned about the economic impact of US President Trump's implementation of protectionist trade policies, and investors are cautious about the dollar.
In terms of economic data on Monday, U.S. retail sales rose 0.2% in February, a 0.6% increase lower than the average expectation of economists surveyed by Dow Jones. Retail sales in January shrank by 1.2%.
The U.S. retail sales growth in February was lower than expected, and the data in the previous month was revised down, which aggravated the outside world's concerns about a decrease in consumer spending. Seven out of 13 categories in the report saw a decline, especially the motor vehicle data, which was originally expected to rebound from January's weakness.
In addition, data released by the New York Fed on Monday showed that the manufacturing activity index fell from 5.7 to -20 in March, with input prices rising to its highest level in more than two years.
Forex markets have changed in recent months, with traders reassessing their initial expectations for Trump’s economic policy. Originally, the market expected Trump's policy to support the dollar and weaken other currencies, but this assumption was revised by the market, causing the dollar to pull back sharply since mid-January.
BallingerGroup Forex market analyst Kyle Chapman said: "I think the market was wrong in its initial judgment. The market originally expected tax cuts and regulation to boost economic growth, but at the same time brought some risk aversion. In fact, protectionism is the focus and caught the market off guard."
While Treasury Secretary Bescent ruled out the possibility of a financial crisis in an interview aired on Sunday, he alsoIt said there is "no guarantee" that the United States will not fall into recession.
Asian Market
The first two months of this year, China's economy started stronger than expected. Industrial production increased by 5.9% year-on-year, higher than market expectations of 5.3%. Retail sales also exceeded expectations, up 4.0% year-on-year, while the expected increase of 3.8% year-on-year, reflecting the continuous improvement of consumer demand.
At the same time, fixed asset investment increased by 4.1% year-on-year, higher than the expectation of 3.2%, but the real estate industry continued to be weak, with real estate investment falling by -9.8% year-on-year. In addition, private investment remained flat, indicating a weaker confidence among small and private enterprises.
China's National Bureau of Statistics pointed out that existing and new policies aimed at stimulating growth have begun to take effect, resulting in steady expansion of industry and services, improved investment and stable employment conditions. Officials stressed that "new quality productivity" is the key driver of growth momentum.
In order to further boost domestic demand, the State Council of China announced a "special action plan" over the weekend, aiming to increase family income, introduce childcare subsidies, and reduce fiscal burdens to encourage consumption.
While the program is widely circulated among local governments, there is a lack of specific details on the implementation of financial support, and therefore there is uncertainty in its direct impact.
European Market
European Central Bank Deputy Governor Luis de Guindos acknowledged that US President Donald Trump's tariff policy has made central bank monetary policy decisions more challenging and created an environment where uncertainty is increasing.
In an interview with Spanish radio Onda Celo, deGuindos pointed out that "clearity about future decisions" has weakened in a situation that is "more opaque than six months ago."
He also delayed the ECB's inflation target schedule, saying that inflation is now expected to reach its 2% target in the first quarter of 2026 due to rising energy prices, later than the previous 2025 mid-term forecast.
Despite these concerns, deGuindos is cautiously optimistic that "everything is moving in the right direction." While tariffs may lead to some short-term inflationary impacts, he said the slowdown in economic activity caused by trade disruptions may eventually offset these pressures over time.
U.S. market
U.S. retail sales in February rose 0.2% month-on-month to $722.7B, far lower than expected 0.7%. Sales except automobiles rose 0.3% month-on-month to $584.7B, lower than expected 0.5%.
Sales without gasoline increased by 0.3% month-on-month. to USD669.9B. Sales except automobiles and gasoline increased by 0.5% month-on-month to US 627.2BYuan.
Total sales from December to February increased by 3.8% avatradescn.compared with the same period last year.
Trump officially announced that Bowman will take over as vice chairman of the Federal Reserve's financial supervision.
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