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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Foreign Exchange Decision Analysis]: Gold soars by hundreds of dollars in a single day, and non-US currencies counterattack." Hope it will be helpful to you! The original content is as follows:
The dollar fell for the seventh consecutive week, with trading approaching a three-year low, as concerns about the U.S. economy continue, the Federal Reserve maintains a cautious stance and tariff tensions remain high.
The European Central Bank (ECB) announced Thursday that, as widely expected, it lowered key interest rates by 25 basis points (bps) after its April policy meeting. In a post-conference press conference, ECB President Christine Lagarde did not suggest a next policy move, but acknowledged that the economic outlook for the eurozone was clouded by uncertainty.
The number of people who requested initial jobless claims per week fell to 215,000 from 224,000 the previous week, according to data from the U.S. on Thursday. Meanwhile, U.S. President Donald Trump said on Thursday that China has contacted his administration to negotiate on tariffs, adding that he believes they will reach an agreement with China.
Forex Market:The US dollar index showed overall range fluctuations this week, but it still closed down for the fourth consecutive week. European and American markets closed on Friday due to holidays, and the U.S. index closed around 99.4 on Thursday, the lowest level in three years, and has fallen by more than 8% this year. Boosted by the weak dollar, non-US currencies still perform well. Among them, the pound closed higher against the US dollar for nine consecutive trading days, while the Australian dollar rose against the US dollar and New Zealand dollar against the US dollar for seven consecutive days. The dollar fell to its lowest level since September last year, while the euro was the highest since February 2022.
Gold Market:Spot gold closed higher for the second consecutive week, continuing the rise last week and hitting a new high, and has accumulated a total of 2018 this week.It rose 2.76%, reaching a high of $3,357.68 per ounce, mainly due to weakening the dollar and escalating trade tensions, which soared by more than $100 during the day on Wednesday. The price of jewelry from many domestic gold jewelry brands has reached 1,000 yuan/gram. In addition, data from the World Gold Association showed that in the first 11 days of April, the net inflow of physical gold ETFs in China reached 29.1 tons.
Crude oil market: International oil prices closed higher for the second consecutive week, new sanctions imposed on Iran's oil exports have intensified supply concerns, and Trump's optimistic attitude towards European and American trade negotiations has also boosted market sentiment to a certain extent.
Review of the news this week As Trump continued to criticize Federal Reserve Chairman Powell and urged him to cut interest rates as soon as possible, Powell hit back. He not only downplayed the expectation of interest rate cuts, saying that the strong performance of the labor market relies on the stability of prices and must be prevented from continuing overheating of inflation due to tariffs, but also made it clear that there is no "Feder put option." Trump posted several articles on social media, accusing Powell of his actions of being "late and wrong", saying that the Fed should have followed the ECB's interest rate cuts long ago, and also claimed that Powell "the sooner he left, the better." Trump criticized Powell for playing politics and said that the president has the right to dismiss the Federal Reserve Chairman. He has reportedly discussed with several advisers to fire Powell, but Treasury Secretary Becent believes the move is not worth the cost. 1. Powell withstands Trump's pressure: No interest rate cuts, no saving the market!
2. The mineral agreement between the United States and Ukraine is scheduled, and the United States, Europe and Russia and Ukraine are suppressing the ceasefire. On April 17, local time, Trump said that he would officially sign a mineral agreement with Ukraine on the 24th. On the same day, Ukrainian President Zelensky revealed that Ukraine and the United States have signed a memorandum of intention to cooperate on minerals, saying that this will become an "important starting point for bilateral cooperation." Ukrainian Vice Prime Minister Sverrikenko also confirmed that the memorandum clarified the working framework, the text of the agreement is still under revision, and the final version still needs approval from the parliaments of the two countries. In addition, the two sides also plan to establish an investment fund for post-war reconstruction of Ukraine.
At the same time, the United States is stepping up the process of ceasefire in Russia and Ukraine. Trump said he would "heard Russia's response to the ceasefire proposal this week" and said the United States "will receive news from Russia soon." Secretary of State Rubio held talks with representatives of Ukraine, France, Britain and Germany in Paris on the 17th. The French Foreign Minister said that this was the first time that the United States, Ukraine and Europe "sit at the same table" to discuss the conflict between Russia and Ukraine, and the next round of talks is scheduled to be held in London next week. Rubio also spoke with Russian Foreign Minister Lavrov to inform the Paris meeting.
3. Canada: A six-month tariff relief will be given to some U.S. goods
The Canadian Treasury announced this week new measures against Canadian businesses and entities affected by the Canadian-US tariff dispute. A performance-based exemption framework for automakers was announced first, aiming to incentivize automakers to continue production and investment in Canada.
In view of the integration of North American automotive industry, this move willManufacturers who continue to produce cars in Canada are allowed to import a certain number of cars assembled in the United States and assembled in the United States into Canada without paying counter-tariffs imposed by Canada.
Secondly, the Canadian Ministry of Finance announced that it will impose a temporary tariff exemption of six months for goods imported from the United States for manufacturing and processing in the fields of food and beverage packaging.
4. Tariff negotiations: Trump is optimistic, Japan and Europe point out obvious differences
The US government has continued to increase its investment in the global trade game recently. Although smartphones, avatradescn.computers and other products are temporarily excluded from the list of reciprocal tariffs, Trump said he would separately evaluate and impose taxes on semiconductors and the entire electronic supply chain. avatradescn.commerce Secretary Lutnik said the relevant tariffs may be issued within one to two months. At the same time, the United States has also launched an import survey on key minerals such as rare earths and uranium, and launched a "232 investigation" on semiconductors and drugs, sending a strong signal of further imposing tariffs. In addition, Trump also hinted that short-term exemptions may be imposed on cars and parts, providing a buffer period for automakers to move back to the United States for production.
The US-EU differences remain unchanged in trade negotiations with the EU, and little progress has been made. It is reported that senior EU trade officials still find it difficult to judge the true position of the US after meeting with the US for several hours in Washington. Although Trump said in a high-profile manner that he was "100%" confident of reaching an agreement and said that the White House was "ready to sign", the actual tariff measures are likely to not be avatradescn.completely cancelled, and the EU is not optimistic about this.
5. The ECB cut interest rates again: ready and respond flexibly
The ECB cut interest rates for the seventh time since June last year. The interest rate statement deleted the term "restrictive" and Governor Lagarde emphasized that the downward risks of economic growth have increased, and the central bank must be ready to deal with unpredictable situations at any time.
The ECB lowered the deposit mechanism interest rate by 25 basis points to 2.25%, in line with market expectations and cut interest rates for the sixth consecutive meeting. It is the seventh interest rate cut since eight meetings, reducing borrowing costs to the lowest level since early 2023. The main refinancing rate and marginal loan rate were lowered to 2.4% and 2.65% respectively.
The ECB stated that the Management avatradescn.committee did not make specific avatradescn.commitments on the future interest rate trend. The service industry's inflation rate has declined significantly recently, resolutely ensuring that the inflation rate is stable and sustainable at the medium-term target of 2%.
6. The Bank of Canada stopped seven consecutive declines
The Bank of Canada announced that it would maintain the benchmark interest rate at 2.75%, ending the previous seven consecutive interest rate cuts. This decision is mainly to further observe the impact of US tariff policies on the economy. The central bank said it would reduce forward-looking policy guidance until the tariff outlook is clear, butStressed that you are ready to act quickly based on the latest information.
This time, the central bank did not release quarterly economic forecasts as usual, but analyzed them based on two possible scenarios of U.S. trade policy: under the optimistic scenario, if most tariffs are cancelled through negotiations, the Canadian and global economies will temporarily slow down, and inflation will drop to 1.5% within a year, and then gradually rebound to the target level of 2%. Under the pessimistic scenario, if tariffs trigger a long-term global trade war, the Canadian economy will fall into a severe recession, and inflation may soar to more than 3% in mid-2026 before falling back to 2%.
The interest rate swap market shows that traders expect the Bank of Canada to keep interest rates unchanged in June at 67%.
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