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The U.S. dollar index continued its rise, and U.S. oil closed above $100 for the first time in nearly four years!
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Hello everyone, today XM Forex will bring you "[XM Group]: The U.S. dollar index continued its rise, and U.S. oil closed above $100 for the first time in the past four years!". Hope this helps you! The original content is as follows:
On March 31, spot gold was trading around US$4,502 per ounce. Gold prices rose for the second consecutive trading day on Monday, mainly driven by safe-haven demand triggered by continued conflicts in the Middle East, although the market no longer expected the Federal Reserve to Interest rates will be cut this year; U.S. crude oil is trading around $106.08 per barrel. Oil prices rose nearly 4% on Monday. The Houthi armed forces in Yemen launched their first attack on Israel, further expanding the conflict in Iran and exacerbating market concerns about Red Sea shipping and oil transportation routes around the Arabian Peninsula.
The U.S. dollar index rose 0.22% on Monday, hitting its highest level since May 19, while the euro fell 0.44% against the U.S. dollar to $1.1457, affected by concerns that the continued war between the United States, Israel and Iran may drag down economic growth.
U.S. President Trump has threatened to destroy Iran’s energy facilities if it does not open the Strait of Hormuz, while rising oil prices have exacerbated inflationary concerns and also raised concerns about energy costs harming consumers and economic growth. State Street Global Market Strategists said investors are beginning to pay attention to the growth dimension, and are particularly worried about the prospects of more fragile economies such as the United Kingdom and the European Union.
The U.S. dollar also benefited from safe-haven buying and the U.S.'s relative advantage as a net energy exporter. Federal Reserve Chairman Powell said he would wait and see the impact of the war on the economy and inflation, while federal funds rate futures traders have withdrawn their expectations for an interest rate cut within the year.
The Japanese yen rose 0.42% to 159.63 yen against the US dollar. It once exceeded the 160 mark. Officials from the Japanese Ministry of Finance issued the strongest warning of intervention so far. The governor of the Bank of Japan also said that the inflationary pressure caused by the weak yen may provide the basis for future interest rate increases. GBP/USD falls 0.57% to 1.31At $81, the Australian and New Zealand dollars fell to two-month and four-month lows respectively.
Asian Markets
China's manufacturing purchasing managers' index (PMI) jumped to 50.4 in March, xmaccount.compared with 49 in February, according to the latest data released by the National Bureau of Statistics (NBS) on Tuesday.
The reading was well above market expectations for the reporting month of 50.1.
The NBS non-manufacturing PMI rose to 50.1 in March, an increase from 49.5 in February. The market consensus is 49.9.
European market
European sentiment further deteriorated in March, with the Eurozone economic sentiment index falling to 96.6 from February and the EU falling to 96.7, both further below the long-term average of 100. Employment expectations indicators also fell to 97.3 and 96.4 respectively.
The decline in market sentiment was mainly driven by a sharp decline in consumer and retailer confidence, with the service sector also making a small contribution to the decline. Construction improved, partially offsetting this, and industrial confidence overall remained stable.
Across major economies, the deterioration was uneven but generally negative. France (-3.7) and Spain (-2.4) saw the largest declines. The Netherlands (-1.5) and Italy (-1.3) also experienced significant declines. Germany and Poland were relatively stable, but not enough to offset broader regional weakness.
The Swiss KOF Economic Barometer fell sharply from 103.8 to 96.1 in March, lower than the expectation of 100.6, indicating that the growth momentum has deteriorated significantly.
The decline reflects an overall slowdown, with both production and demand-side indicators weakening, suggesting the economy is losing momentum faster than expected.
The decline was particularly pronounced in the manufacturing and foreign demand sectors, with a xmaccount.combination of indicators showing strong setbacks. Subcomponents tracking exports, order backlogs, and the overall business situation were all under pressure.
In the manufacturing sector, almost all manufacturing sub-indicators deteriorated, with significant weakness in the machinery, electrical equipment, metal and paper industries.
US Markets
Federal Reserve Chairman Jerome Powell struck a tone of "strategic ambiguity" at a Harvard event, suggesting policymakers are not ready to deal with the current oil-driven supply shock, even as risks to the mission intensify on both sides. As the war with Iran drags on, Powell acknowledged the Fed may ultimately face difficult trade-offs but stressed the economic impact remains uncertain.
"There is a tendency to ignore supply shocks of any kind," Powell said, emphasizing the Fed's baseline approach to energy-driven inflation. At the same time, he emphasized that the key to this approach is to expect stability. "Inflation expectations appear to be well anchored beyond the short term," he noted, while adding that policymakers will "carefully monitor" whether that trend holds.
A key limitation is the well-known lag in the transmission of monetary policy. “Monetary policy has a long delay and a lot of variability,” Powell said, warning that by the time tighter policy takes effect, “oilThe price shock is probably long gone. "This further underscores the Fed's reluctance to respond prematurely to a surge in inflation that may be temporarily supply-driven.
For now, Powell said policy is "in good shape... to wait and see." "However, if inflation expectations start to rise or second-round effects occur, the balance could change quickly. Until then, the Fed will continue to remain stagnant, navigating between the risk of supply shocks and the constraints of policy timing.
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