The US dollar suffered large losses against its major rivals to begin the month of March as the disappointing macroeconomic data releases, combined with the Trump administration’s tariffs, revived fears over an economic downturn in the US.
Early Monday, the DXY Dollar Index trades marginally lower on the day below 104.00, while US stock index futures lose between 0.4% and 0.6%.
On Friday, data published by the US Bureau of Labor Statistics showed that nonfarm payrolls (NFP) rose by 151,000 in February, below the market expectation of 160,000.
The employment report also showed that the Unemployment Rate edged higher to 4.1% from 4% in January, while the Participation Rate declined to 62.4% from 62.6% in the same period.
In his last public appearance before the March policy meeting, Federal Reserve Chairman Jerome Powell noted on Friday that the uncertainty around the Trump administration’s policies are high and repeated that they can maintain policy restraint for longer if inflation progress stalls or that they can ease the policy if the labour market unexpectedly weakens.
EURUSD preserved its bullish momentum and gained more than 4% in the previous week. The pair stays in a consolidation phase at around 1.0850 in erly European trading on Monday.
GBPUSD benefited from the broad-based USD weakness and rose more than 2.5% last week, with the pair trading virtually unchanged on the day at around 1.2920. The Bank of England will release its Quarterly Bulletin later in the day.
Gold saw weekly gains but struggled to gather bullish momentum after reclaiming $2,900. XAUUSD holds steady near $2,910 to begin the European session.
USDCAD gained traction and snapped a three-day losing streak on Friday, while the pair fluctuates in a tight channel slightly above 1.4350 in on Monday. On Wednesday, the Bank of Canada will announce monetary policy decisions.
Meanwhile, Trump told Fox News over the weekend that tariffs on some imports from Canada and Mexico planned for April 2 could go up.
USDJPY remains on the back foot and trades in negative territory below 148.00 to begin the new week. The data from Japan showed earlier in the day that Labor Cash Earnings rose by 2.8% on a yearly basis in January, following the 4.4% increase recorded in December and falling short of the market expectation of 3.2%.
(Source: OANDA)