Support
Pound hits multi-year high against euro
GBP reached an 8-year peak against EUR, with expectations of less aggressive BoE rate cuts boosting sentiment.
USD Strengthens: The DXY hit 106.63, its third consecutive gain, supported by rising US Treasury yields ahead of the CPI report.
China's Trade Surge: Exports to the US hit their highest since 2022, but Beijing’s stimulus efforts are losing global market impact.
Crypto Rebound: Bitcoin briefly fell below $95,000 as optimism cooled, with smaller digital assets plunging 15% before recovering.
USD gains
The US dollar strengthened against most major currencies as market activity remained subdued ahead of today's US Consumer Price Index (CPI) report. The Dollar Index (DXY) recorded its third consecutive day of gains, reaching a peak of 106.63 boosted by rising US Treasury yields.
Pound Hits Multi-Year High Against Euro
The British pound reached its strongest level against the euro in over eight years, as markets anticipate the Bank of England (BoE) will pursue less aggressive interest rate cuts compared to the European Central Bank. Bank of America has emerged as a prominent pound bull, forecasting an 8% surge in the currency's value against the US dollar by 2025.
China’s Trade and Stimulus Challenges
Chinese exports to the US climbed to their highest levels since September 2022, driven by businesses expediting shipments ahead of impending tariffs. Economists are raising expectations for more aggressive economic support from Beijing to stimulate growth. However, China’s influence on global markets continues to wane, with recent promises of stimulus having minimal impact.
Cryptocurrency Market Retreats
Cryptocurrencies faced renewed selling pressure overnight as enthusiasm generated by Donald Trump’s recent embrace of the sector waned. Bitcoin briefly dipped below $95,000, while an index tracking smaller digital assets plunged by 15%, prices managed to rebound again/.
Commodities
The crude oil market saw modest gains during the session, supported by optimism stemming from recent actions by China's Politburo. Brent was higher up near $72 while WTI hovered near $68.46.
In the precious metals market, gold remained steady, underpinned by ongoing geopolitical tensions in the Middle East. Spot gold rose almost 0.1%, trading at $2,690 per ounce.
