Europe Roundup: Pound weakens against dollar, European stocks tumbled to a 16-month low, Gold holds steady, Oil tumbles further-April 7th,2025

Market Roundup

• German Exports (MoM) (Feb) 1.8%, 0.0% previous

• German Imports (MoM) (Feb) 0.7%, 5.0% previous

• German Industrial Production (MoM) (Feb) -1.3%, -0.9% forecast, 2.0% previous

• German Trade Balance (Feb) 17.7B, 18.4B forecast, 16.2B previous

• German Industrial Production (YoY) (Feb) -4.00%, -1.49% previous

• Finnish Trade Balance (Feb) -0.21B, -0.19B previous

• EU Sentix Investor Confidence (Apr) -19.5, -8.9, -2.9 previous

• EU Retail Sales (MoM) (Feb) 0.3%, 0.5%, 0.0% previous

• EU Retail Sales (YoY) (Feb) 2.3%, 1.8%, 1.8% previous

Looking Ahead Economic Data(GMT)

• 13:00 French 12-Month BTF Auction 2.131% previous

• 13:00 French 3-Month BTF Auction 2.244% previous

• 13:00 French 6-Month BTF Auction 2.211% previous

•14:00 US CB Employment Trends Index (Mar) 108.56 previous

•15:30 US 3-Month Bill Auction 4.205%

•15:30 US 6-Month Bill Auction 4.070%

Looking Ahead Events And other Releases(GMT)

•14:30 US  FOMC Member Kugler Speaks

Currency Forecast

EUR/USD: The euro initially gained but lost ground as U.S. President Donald Trump's sweeping tariffs deepened the market sell-off, raising fears of a global recession. Despite China's retaliation, Trump showed no intention of backing down, prompting investors to anticipate interest rate cuts by both the European Central Bank (ECB) and the Federal Reserve. Traders have increased bets on further Federal Reserve rate cuts this year, expecting policymakers to ease more aggressively to support U.S. economic growth. Meanwhile, traders are pricing in an ECB deposit rate of 1.70% in December, down from 1.75% on Friday and 1.9% last week, before Trump’s tariff announcement. Immediate resistance can be seen at 1.1053(Daily high), an upside break can trigger rise towards 1.1168(23.6%fib).On the downside, immediate support is seen at 1.0856(50%fib), a break below could take the pair towards 1.0783(April 2nd low).

GBP/USD: -The pound weakened against the dollar   on Monday as investors shied away from risk-sensitive assets as uncertainty grew around global trade policy and fears mounted of a recession triggered by U.S. President Donald Trump's tariffs.Global financial markets were delivered a significant blow on Monday after Trump warned foreign governments they would have to pay  a lot of money  to lift the levies that he called  medicine .Sterling   fell to a new one-month low of $1.2825 and was last down 0.5% against the greenback. On Friday, it dropped roughly 1.5% its biggest single-day drop since March 2023. Immediate resistance can be seen at 1.2975(38.2%fib), an upside break can trigger rise towards 1.3165(23.6%fib).On the downside, immediate support is seen at 1.2811(50%fib), a break below could take the pair towards 1.2686(March 4th low).

AUD/USD: The Australian dollar eased on Monday as fears of a global recession, triggered by escalating trade tensions, weighed on the currency. U.S. President Donald Trump unveiled reciprocal tariffs, primarily targeting China and its main trading partners. Concerns about China's economic outlook pushed the Australian dollar below 60 cents, its lowest level since the COVID-19 pandemic. The Reserve Bank of Australia (RBA) kept rates steady, citing global risks and awaiting data to assess if inflation will return to the 2-3% target, while concerns about strong labor market growth stoking inflation persist. At GMT 06:33, The Australian dollar  was last  trading up 0.06% to $0.6044. Immediate resistance can be seen at 0.6055(38.2%fib), an upside break can trigger rise towards 0.6170(50%fib).On the downside, immediate support is seen at 0.5943(23.6%fib), a break below could take the pair towards 0.5900(Psychological level

 USD/JPY: The dollar slipped lower on Monday as growing recession fears in the U.S. and concerns over a trade war boosted demand for the safe-haven yen. The trade conflict intensified when China retaliated with countermeasures, including a 34% tariff on U.S. goods and export restrictions on rare earths. Investors speculated that the looming recession would outweigh any inflationary impact from tariffs. The Bank of Japan expressed concerns over rising uncertainty in Japan's economy, as some firms feared the effects of higher U.S. tariffs on their profits, potentially disrupting the economic recovery. While maintaining a positive regional economic outlook, the BOJ cautioned that Trump's tariffs could undermine the wage and price cycle necessary for future interest rate hikes. Immediate resistance can be seen at 146.19(38.2%fib) an upside break can trigger rise towards 146.87(April 7th high). On the downside, immediate support is seen at 144.72(38.2%fib) a break below could take the pair towards 144.00(Psychological level).

Equities Recap

European shares plummeted to a 16-month low on Monday as investors feared a potential recession, following U.S. President Donald Trump's continued escalation of the trade war with no signs of backing down..

At GMT (12:31) UK's benchmark FTSE 100 was last trading down at 4.23 percent, Germany's Dax was down by 4.22 percent, France’s CAC  was down by 4.15 percent.

Commodities Recap

Gold prices remained steady on Monday, supported by strong central bank demand and expectations of an early interest rate cut by the U.S. Federal Reserve.

Spot gold was up 0.1% $3,040.57 an ounce as of 1139 GMT, after hitting a session-low of $2,971.09 earlier in the session as some investors sold bullion to cover losses in other trades.

Oil prices extended losses on Monday, dropping more than 2%, as escalating trade tensions between the U.S. and China fueled recession fears that could dampen crude demand, while OPEC+ prepares to increase supply.

Brent futures were down $1.61, or 2.5%, to $63.97 per barrel at 1301 GMT and U.S. West Texas Intermediate crude futures were down $1.64, or 2.7%, at $60.35.