The dollar index closed this week with its biggest weekly performance in more than two years as traders grew disappointed with the US exceptionalism and expected that trade policies would slow down the growth of the world’s largest economy.
The Bloomberg Dollar Spot Index dropped 2.3%, marking the biggest weekly decline at the close since November 2022. Data from the U.S. Commodity Futures Trading Commission as of March 4 showed that speculative traders, including hedge funds and asset management companies, have reduced their bets on the dollar for seven consecutive weeks. This is the lowest bullish sentiment towards the dollar since before the U.S. presidential election last October.
JPMorgan Chase foreign exchange strategist Meera Chandan wrote on Friday: “This week marks a shift in the foreign exchange market landscape, and as a result, our portfolio has also undergone a shift.” The team wrote that they are now “for the first time in over a year” strategically shorting the US dollar, citing the weakening of American exceptionalism and the economic recovery in Europe. JPMorgan has joined the ranks of Wall Street’s bearish players.
Europe’s spending plans have boosted the region’s currency exchange rates. This week, the Swedish krona performed best among the Group of Ten currencies, rising by approximately 7% against the US dollar, followed by the euro, which increased by 4.6%. The Canadian dollar lagged behind other currencies due to tariff risks.
Lee Ferridge, a strategist at State Street Bank, said: “Germany’s huge fiscal shift has boosted growth expectations in the eurozone, while concerns over the growth outlook for the US economy are intensifying at this time.”
After German political parties agreed to release hundreds of billions of euros in debt support financing for defense and infrastructure investment, the yields on Hungarian, Polish and Czech bonds also joined the global upward trend.
The currency markets in Eastern Europe were once in turmoil as the yields on German government debt soared due to the relaxation of strict government borrowing limits, and the increase was even greater than that of riskier debt in Eastern Europe.
A report by Goldman Sachs analysts this week also pointed out that Germany’s fiscal expansion might “alter” the interest rate outlook in Eastern Europe.
The forint rose more than 0.1% against the euro on Friday and is on track to end the week up 0.9%. So far in 2025, it has climbed more than 3%. Over the past five trading days alone, the forint has gained more than 5% against the US dollar. On Friday, the Czech koruna also rose 0.3% against the euro.
Earlier this week, the new leadership of the Hungarian central bank reaffirmed its tough stance amid persistent inflationary pressures, and the Hungarian currency hit a five-month high.
Piotr Matys, a senior analyst at inTouch Capital Markets, said that Germany’s intention to significantly increase investment in defense and infrastructure will benefit the economies of Central and Eastern Europe.
Technical analysis:
Gold: Last Friday, the price continued to clear liquidity up and down with the non-farm payroll report, without showing a trend. New buying emerged around 2900 on the downside, while selling pressure came from above 2930. During the Asian session today, the price retreated from around 2915. A first buy attempt can be made near the support at 2908/10. If it fails, the second buy attempt should be made after the liquidity has been cleared once at 2900. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Nasdaq: Last Friday, we clearly pointed out that we suggested waiting for the price to break below the new low of 20,000 points, and after the liquidity was swept away, we could then catch the rebound. Currently, it seems that our strategy is perfect. The price opened lower today and is now filling the gap. If the gap is recovered later, we can consider continuing to be bullish. At the same time, we can try to go long again after the liquidity is refreshed near 19,700. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: After breaking through the 67 mark last Friday, the price rose all the way to the 68.25 level. However, it retreated to around 67 in the late night to seek confirmation. It opened lower this morning, and currently the price is attempting to fill the gap. If the gap is recovered within the day and the 67 level is held steady, one or two long positions can be attempted. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
15:00 Germany’s seasonally adjusted trade balance for January (billion euros)
17:30 Eurozone March Sentix Investor Confidence Index
22:00 US Conference Board Employment Trends Index for February
