EUR/USD Hits Three-Year High As US White House Policy Concerns Mount

Economic

Forex

Summary:

The EUR/USD pair surged to a fresh three-year peak on Monday, holding steady at 1.1518 amid growing unease over US economic policy.

Key Drivers Behind the EUR/USD Rally

Investors returning from the Easter break were met with renewed concerns over the US White House’s stance on the Federal Reserve and its Chair, Jerome Powell. Questions surrounding the Fed’s independence have unsettled markets, particularly after Donald Trump ramped up his criticism of Powell.

While the US President has previously threatened to dismiss Powell, legal and institutional barriers make such a move difficult. Nevertheless, Trump’s rhetoric has grown increasingly aggressive, as he pushes for swifter interest rate cuts and greater monetary policy flexibility. The Fed, however, remains caught between taming inflation and navigating a robust labour market—a delicate balancing act that has only heightened market anxiety.

These tensions compound existing worries over escalating trade conflicts and broader uncertainty surrounding the Trump administration’s economic policies. Over the weekend, Chicago Fed President Austan Goolsbee added to the unease, warning that US tariffs could dampen economic activity by summer.

Technical Analysis: EUR/USD

H4 Chart Outlook

The pair previously consolidated around 1.1333 before breaking upward.
After finding support at 1.1390, it formed a bullish wave towards 1.1530.
A downward correction towards 1.1390 is now anticipated. A break below this level could extend losses to 1.1245.
The MACD indicator supports this view, with its signal line above zero but pointing sharply downward.

H1 Chart Outlook

The market briefly consolidated near 1.1390 before rallying to 1.1530.
A pullback towards 1.1390 is now in focus, with a breakdown potentially opening the door to 1.1245.
The Stochastic oscillator aligns with this scenario, hovering above 80 and poised for a decline towards 20.

Conclusion

The EUR/USD rally reflects mounting scepticism towards US policy stability, with technical indicators now hinting at a potential retracement. Traders will be watching closely for further Fed commentary and political developments that could sway the pair’s trajectory.

Source: ACTIONFOREX

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Dark Current

Commodity

Energy

Oil prices fell by more than 1.5 per cent on Monday on concerns that tariffs levied by the US on its partners could create economic headwinds and dent demand for oil in global markets.

Brent, the benchmark for two thirds of the world's oil, slid 1.63 per cent to $66.85 a barrel at 9.23am UAE time on Monday. West Texas Intermediate, the gauge that tracks US crude, was down 1.7 per cent to $63.58 per barrel.

US President Donald Trump announced sweeping tariffs on its trade partners, raising concerns that global economy could slowdown and impact oil markets.

The International Monetary Fund in January projected the global economy to expand by 3.3 per cent this year, with the US economy set to grow by 2.7 per cent.

The IMF, however, is expected to lower global economic growth when it releases its World Economic Outlook on Tuesday.

“Our new growth projections will include notable markdowns, but not recession,” IMF managing director Kristalina Georgieva, said last week.

“As market focus reverts to the economic impact of Trump’s tariffs, especially with the World Bank and IMF meetings in Washington this week, I expect the souring global growth outlook and sluggish oil demand sentiment will be back centrestage, weighing on crude,” Vandana Hari, chief executive of Singapore-based Vanda Insights told The National.

Investors are also keeping a close eye on developments related to the US and Iran talks.

Talks between Iran and the US on Tehran's nuclear programme are gaining momentum, with the “unlikely now possible” following progress this weekend in Rome, according to mediators.

The second round of negotiations led by Iranian Foreign Minister Abbas Araghchi and US envoy to the Middle East Steve Witkoff ended on a positive note in the Italian city during the weekend. The Oman-brokered talks lasted for four hours and officials declared it a “good meeting” that yielded progress.

“These talks are gaining momentum and now even the unlikely is possible,” Omani Foreign Minister Badr Al Busaidi said on X.

Oman’s Foreign Ministry said the talks resulted in an agreement to move towards the next phase of negotiations aimed at sealing “a fair, enduring and binding deal”.

If a deal is struck between the two countries, it could ease some supply concerns if sanctions relief is provided for Iran.

Last week, the US imposed new sanctions on Iran to curb its exports, including against a “teapot” refinery – or small independent oil refiner – based in China.

“The fact that the two sides have now concluded two fruitful rounds of nuclear negotiations over the past fortnight is the bigger development on the Iran front, and at this point, mildly bearish,” Ms Hari said.

Oil prices settled more than 3 per cent higher on Thursday, posting the first weekly gain in three weeks on hopes of a potential trade deal between the US and the EU and new sanctions on Iran's oil exports.

Source: THENATIONALNEWS

Risk Warnings and Disclaimers

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Warren Takunda

Economic

It will be a shortened trading week for financial markets due to Easter holidays in Europe and the United States. While risk-aversion sentiment may continue to influence global market movements, key economic data, including manufacturing and services Purchasing Managers’ Indices (PMIs), and major corporate earnings are expected to play a critical role in shaping future market trends.

S&P Global is scheduled to release its flash manufacturing and services PMIs for April across major economies on Wednesday. These indices measure business activity based on new orders, employment, and confidence. A reading above 50 indicates expansion, while a figure below 50 signals contraction.

Europe

In March, the eurozone’s manufacturing PMI improved to 48.6 from 47.6 in February, marking the mildest contraction since January 2023. Germany and France both recorded notable improvements in manufacturing activity. Germany’s PMI rose to 48.3 from 46.5—the highest since August 2022—while France’s reading came in at 48.5, reflecting the softest downturn in over two years. However, “concerns over geopolitical uncertainty and client spending kept optimism in check,” according to the S&P Global report.

Consensus forecasts suggest that business activity may slow in April due to tariff-related economic uncertainty. The eurozone’s manufacturing PMI is expected to drop to 47.4, with Germany and France forecast to record 47.5 and 47.9, respectively.

The eurozone’s services PMI expanded for the fourth consecutive month in March, with a reading of 51.0, up from 50.6 in February. Germany’s services PMI also posted its fourth consecutive month of expansion, at 50.9. However, the pace of growth slowed as new business declined at the fastest rate in six months amid weak demand and heightened uncertainty. Optimism persisted, driven by Germany’s fiscal expansion, new product launches, and technological progress. In contrast, France’s services sector contracted for the seventh consecutive month, reflecting continued weak demand.

Consensus projections suggest further, albeit softer, growth in April. The eurozone’s services PMI is forecast at 50.4, with Germany and France expected to record 50.3 and 47.6, respectively.

Additionally, Germany’s Ifo Business Climate Index—a leading indicator of economic health—is due on Thursday. The index rose to 86.7 in March, the highest level since July 2023, supported by historic debt reforms that unlocked billions in funding for defence and infrastructure. However, the index is expected to edge lower this month, likely due to the impact of Trump’s newly announced tariffs.

United Kingdom

In the UK, the S&P Global manufacturing PMI fell to 44.9 in March, extending its downturn for a sixth consecutive month and marking the lowest reading in 17 months. Business confidence dropped to a two-and-a-half-year low amid expectations of tighter fiscal policy, tariff uncertainty, and geopolitical tensions. April’s reading is forecast to decline further to 44.0.

In the services sector, the index was revised up to 52.5 in March from the preliminary estimate of 53.2, the highest since August 2024. However, constrained household budgets and geopolitical tensions are expected to continue weighing on business sentiment. The services PMI is projected to ease to 51.4 in April.

United States

In the US, the manufacturing PMI fell sharply to 50.2 in March from 52.7 in February. The decline was largely attributed to a pullback from February’s front-loaded output surge. Nevertheless, business confidence weakened to its lowest level since December 2024 amid uncertainty surrounding government policies.

In contrast, the services PMI rose to 54.4 in March, the highest level in 2025. Despite the strong reading, business optimism declined, weighed down by concerns over tariff-related disruptions and federal cost-cutting initiatives. Analysts anticipate that manufacturing will return to contraction in April, with a projected reading of 49.3, while the services index is expected to fall to 52.9.

Big tech earnings in focus

Crucially, this week will also see first-quarter earnings releases from major US technology firms, including Tesla, Microsoft, and Alphabet. These companies, particularly Tesla, have seen their shares come under pressure amid fears that Trump’s tariffs could disrupt supply chains and key international markets.

Analysts expect Tesla’s revenue for the first quarter to grow by 2.6% year-on-year. However, earnings per share are forecast to decline due to factory retools for the new Model Y SUVs and a slowdown in sales due to Elon’s political intervention.

Source: Euronews

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Risk Warnings and Disclaimers

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Glendon

Forex

Economic

China–U.S. Trade War

SHANGHAI (April 21): China kept benchmark lending rates steady on Monday for the sixth successive month, matching market expectations.

Stronger-than-expected first-quarter economic growth data might have reduced the urgency for immediate monetary easing, even as markets wager more stimulus is likely in coming months to keep growth on an even keel, amid an intensifying Sino-US trade war.

Policymakers are also wary of a weakening Chinese yuan and shrinking interest margins at lenders, limiting the scope for easing.

The one-year loan prime rate (LPR) was kept at 3.1%, while the five-year LPR was unchanged at 3.6%.

In a Reuters poll of 31 market participants conducted last week, 27, or 87%, expected no change to either of the rates.

China's gross domestic product (GDP) grew 5.4% in the first quarter, beating expectations, but markets fear a sharp downturn in the year ahead, as US tariff policies pose the biggest risk to the Asian powerhouse in decades.

Export data was yet to capture the impact of higher US tariffs, as many factories front-loaded their orders to beat the duties, analysts said.

A string of global investment banks have lowered their projections for China's economic growth this year, and expected more monetary easing measures to underpin the economy.

Xing Zhaopeng, senior China strategist at ANZ, said the steady LPR fixings suggested that policymakers remain in a wait-and-see mode.

"The impact of tariffs is mainly on exports. Given the sound economic growth in the first quarter, it may be easier to introduce targeted measures for export companies," Xing said.

"The LPR is not seen moving without a cut to the seven-day reverse repo rate first," economists at ING said in a note.

"Low inflation and strong external headwinds amid escalating tariff threats provide a strong case for easing. But currency stabilisation considerations may prompt the People's Bank of China (PBOC) to wait until the US Federal Reserve cuts borrowing costs."

Source: Theedgemarkets

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Risk Warnings and Disclaimers

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Warren Takunda

Stocks

Asian shares were mostly higher Monday and U.S. futures fell as U.S. tech giants prepared to release their latest earnings after the recent spate of market turmoil brought on by President Donald Trump’s trade war.

The futures for the S&P 500 and the Dow industrials were down 0.8%. Oil prices also fell.

U.S. President Donald Trump’s trade war remains a source of deep uncertainty. Economists worry his use of sharp tariff hikes could cause a recession if fully implemented and left in place for a while.

’’One thing that’s absolutely clear — and no longer debatable — is that the reputational hit to the U.S. brand is real, and it’s not fading quietly into the next news cycle,” Stephen Innes of SPI Asset Management said in a commentary.

Big Tech’s “Magnificent Seven” companies, a group consisting of Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms kick off earnings season this week. Since Trump’s inauguration, their combined market value had plunged by $3.8 trillion, or 22%, as of April 20.

Tesla, which makes its electric vehicles in Shanghai, is scheduled to release its full financial report Tuesday after already revealing that its first-quarter car sales dropped by 13% from the same time last year.

Tokyo’s Nikkei 225 index lost 1.3% to 34,279.92 in the absence of signs of significant progress toward a trade deal with Trump. Japanese automakers, in particular, are facing 25% tariffs on exports to the U.S. of autos and auto parts.

The Shanghai Composite index gained 0.5% to 3,291.34, while the Kospi in South Korea added 0.2% to 2,488.42.

Taiwan’s Taiex lost 1.5%, while the Sensex in India climbed 1.1%.

Markets were closed in Hong Kong and Australia.

U.S. markets were shut on Friday and were mixed at Thursday’s close. The Dow industrials sank 1.3%, while the S&P 500 edged up 0.1%. The Nasdaq composite shed 0.1%.

Treasury yields rose early Monday.

Also early Monday, U.S. benchmark crude oil sank 93 cents to $63.08 per barrel. Brent crude, the international standard, gave up 94 cents to $67.02 per barrel.

The U.S. dollar bought 140.76 Japanese yen, its weakest level since September, down from 141.80 yen. The euro rose to $1.1473 from $1.1404.

A recent drop in the dollar has economists worried that it might reflect something more ominous than the usual ups and downs as Trump tries to reshape global trade: a loss of confidence in the U.S. as a safe haven for investments.

Bitcoin was up nearly 3% at about $87,400.

In the bond market, the yield on the 10-year Treasury rose to 4.36% from 4.32% late Thursday.

Source: AP

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Blue River

Technical Analysis

EURUSD has broken through 1.1500 on growing concerns over Fed independence and mounting political instability in the US. Today’s forecast suggests further upside is possible, with 1.1600 as the next key target — provided bulls defend the 1.1500 support zone.

EURUSD forecast: key trading points

● Market focus: public holiday in Europe

● Current trend: strong bullish momentum

● EURUSD forecast for 21 April 2025: 1.1500 and 1.1600

Fundamental analysis

EURUSD continues to climb rapidly, driven by weakness in the US dollar. The greenback came under pressure after reports surfaced that the White House is exploring legal grounds to remove Federal Reserve Chair Jerome Powell. President Donald Trump has reportedly voiced frustration over the Fed’s reluctance to cut interest rates.

This development has intensified market concerns about political interference in central bank independence, compounding existing unease over trade tensions and uncertainty surrounding Trump’s broader economic agenda.

Chicago Fed President Austan Goolsbee also warned over the weekend that new tariffs could drag on US economic growth, further fuelling demand for the euro and safe alternatives to the dollar.

EURUSD technical analysis

On the H4 chart, EURUSD is firmly within a rising price channel. The Alligator indicator confirms the uptrend, and the breakout above 1.1500 signals continued bullish strength.

As long as bulls hold the price above 1.1500, a move toward 1.1600 is likely in the near term. However, if bears manage to push the pair back below 1.1500, a short-term correction toward 1.1400 could develop.

Source：Technical Analysis

Risk Warnings and Disclaimers

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Michelle

Cryptocurrency

Bitcoin (BTC) experienced a rapid surge on the first day of the week, driven by growing optimism surrounding the United States’ global trade agreements. According to CoinMarketCap data, Bitcoin traded at around $84,000 early in the day, quickly rising to surpass $87,000 and achieving a 2.1% gain throughout the day. This movement sparked a sense of optimism in the broader cryptocurrency market, positively impacting the prices of several leading altcoins.

Bitcoin Aims for $90,000

Last week proved to be quite tumultuous for Bitcoin. Weekly data from CoinMarketCap revealed that the largest cryptocurrency struggled to surpass the $86,000 mark, with its price dipping to as low as $83,200 at one point. However, particularly favorable developments over the weekend helped to elevate Bitcoin’s price.

Bitcoin Price

With this surge, the impacts of the sharp decline experienced earlier in the month began to diminish. Bitcoin had previously fallen to $75,000 due to President Donald Trump‘s imposition of additional tariffs of at least 104% on Chinese goods. Recent statements by Trump have heightened expectations that the trade war could ease, improving investor sentiment.

Trump indicated that the White House has resumed tariff negotiations with China, providing hope to the markets. Experts believe that a reduction in trade war concerns could pave the way for a new wave of growth in the cryptocurrency market. This situation is considered critical for Bitcoin, with potential price movements closely tied to the results of these negotiations.

One of the main reasons for Bitcoin’s sudden rise is attributed to the new Bitcoin purchase made by the publicly-traded Japanese company Metaplanet. The company’s CEO, Simon Gerovich, announced today that they have acquired more BTC. Additionally, cryptocurrency research firm 10x Research suggested that Bitcoin might be poised for significant growth shortly. According to the firm, the downward compression pattern forming in BTC price could set the stage for a sharp upward breakout.

Altcoins Follow Bitcoin’s Lead

Bitcoin’s rise also positively influenced other major altcoins such as Ethereum (ETH) , XRP, and BNB. Ethereum saw a 1.4% increase throughout the day, while XRP gained 1.5%. Popular meme coin Dogecoin (DOGE) and BNB both rose approximately 1.4%, and Cardano (ADA) saw an increase of around 1%. However, Solana (SOL) did not manage to capture the small rally seen by other altcoins.