Asset Summary – Monday, 17 March
GBPUSD faces mixed signals. The unexpected contraction in the UK economy is likely to put downward pressure on the pound, as it suggests weakening economic fundamentals. The Bank of England’s potential reluctance to raise interest rates further could also limit GBP’s upside. However, the weakness of the US dollar, stemming from concerns about the US economy and trade tensions, might offer a degree of support to the GBPUSD pair, preventing a significant decline. The upcoming Spring Statement and updated economic forecasts could introduce further volatility, depending on the Chancellor’s fiscal plans and the OBR’s assessment of the UK’s economic outlook.
EURUSD is demonstrating potential for upward movement as positive economic developments in Germany, including an agreement on debt restructuring and increased state spending, bolster the euro. Investors are monitoring France’s credit rating by Fitch, which could introduce volatility if the rating is revised. Counteracting these positive drivers are concerns stemming from escalating trade tensions, specifically the threat of significant tariffs on EU alcoholic beverages by the US, which could pressure the euro. Geopolitical factors, such as discussions between Trump and Putin regarding the Ukraine war, also introduce uncertainty and may influence investor sentiment toward the pair.
DOW JONES faces potential headwinds as US stock futures declined at the start of the week, following its worst weekly performance since 2023. The previous week’s slide, driven by tariff concerns and recession anxieties, creates a negative backdrop. The market is awaiting retail sales data for insights into consumer spending, which could influence investor sentiment toward the Dow. Furthermore, while the Federal Reserve is anticipated to hold interest rates steady, any surprises could introduce volatility. Even positive news from Nvidia’s AI conference might not be enough to fully offset the broader market concerns impacting the Dow’s trajectory.
FTSE 100 has experienced substantial growth since the start of 2025. Trading activity on CFDs, which mirror the index’s performance, indicates an increase of 454 points, translating to a 5.55% gain. This suggests positive investor sentiment and growing market confidence in the leading UK companies represented within the index.
GOLD is exhibiting bullish behavior, driven by a confluence of factors that are likely to sustain its elevated price. Escalating geopolitical tensions, particularly in the Red Sea, and the potential for a global trade war are creating a strong safe-haven demand for the asset. This demand is further amplified by continuous purchasing from central banks and inflows into ETFs. Although the Federal Reserve’s upcoming policy meeting introduces some uncertainty, the expectation of unchanged interest rates, coupled with unease surrounding new economic policies, provides a foundation for continued strength in gold’s valuation. Therefore, the current environment points towards a potentially positive outlook for gold trading.