Pound-to-Euro: EUR Running on the Fumes of Optimism

Economic

Summary:

The Euro could be reflecting an overconfidence heading into "Liberation Day".

This is the moniker U.S. President Donald Trump has bestowed on his April 02 tariff announcement that will see the rollout of a barrage of new punitive trade measures.

Citi FX strategists view "Liberation Day" as the catalyst for EUR weakness.

However, the Euro is not reflecting any nerves as of yet: the Pound-to-Euro exchange rate is comfortably in the middle of its multi-month range and the Euro-to-Dollar exchange rate is nearly 4% higher than where it started the year.

In fact over the course of the past month, EUR is the third-best performing G10 name.

"EUR resilience in the face of worrying developments on the trade front is either impressive or optimistic," says Daragh Maher, Senior FX Strategist at HSBC. "It feels unsustainable.' Pound-to-Euro: EUR Running on the Fumes of Optimism_1

Pound-to-Euro: EUR Running on the Fumes of Optimism_1

Only the Scandies have outperformed EUR over the past month.

According to HSBC, the market's optimistic stance on the EUR reflects a selective reading of tariff headlines, with a choice to focus on Trump's suggestion upcoming tariffs will be "lenient".

This means traders are choosing to ignore a 25% tariff on EU auto exports and ignore headlines that double-digit tariffs are to be layered on top.

Trump also made a threat on Wednesday that tariffs on the EU could be much larger than planned if it cooperates with Canada to hurt the U.S. Again, the EUR looks to be ignoring this.

"If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!" Trump posted on Truth Social.

The scale of the threat and current levels in spot exchange rates could suggest EUR is running on the fumes of optimism.

"We continue to see tariff risks as underpriced, particularly in FX and equities," says a note from Citi's currency desk.

"The inertia in the FX market might simply reflect confusion about what this all might mean," says Maher.

According to reports, European trade chief Maroš Šefčovič's was told of the tariffs by U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer. Photographer: Claudio Centonze. Copyright: European Union.

Indeed, FX trading veteran Brent Donnelly at Spectra Markets says that at this juncture, "tariffs are untradable."

Others agree. JP Morgan's London trading desk says in a daily briefing that "the market has learnt its lesson, shooting first and asking questions later was a painful experience post-inauguration and therefore a sense of calm is perhaps the best reaction here until we understand the end game."

"In the relative world of FX, the logic might be that all ships are sinking, so there might be no currency implication," points out Maher.

The Pound retains support against the Euro on strong hints the UK will be relatively unaffected by next week's "Liberation Day" tariffs.

CNBC said the U.S. President may not take all of the non-tariff barriers into account when setting tariff rates. He specifically mentioned VAT taxes, which will be welcomed by the UK.

"That could be notable for the UK given the lack of a goods sector imbalance," says Jeremy Stretch, an analyst at CIBC Capital Markets.

CNBC's Eamon Javers said, "A White House official tells me the president is signalling he may not take all of the non-tariff barriers into account when he calculates tariffs on given countries. Those non-tariff barriers, they say, include VAT taxes."

Previously it was mooted that countries that charge VAT could be in line for tariffs, which brought the UK into focus. But dropping the VAT threat means the UK will unlikely feature on Trump's radar.

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

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Kevin Morgan

Economic

Forex

Britain’s economy grew by 0.1% in the fourth quarter of 2024, in line with economists’ expectations from a Reuters poll, the Office for National Statistics (ONS) confirmed on Friday.

The services sector posted a 0.1% increase in output during the quarter, while construction grew by 0.3%. In contrast, production output fell by 0.4%.

Real annual GDP growth for 2024 has now been revised up to 1.1% from an initial estimate of 0.9%, following a 0.4% increase in 2023, the ONS said.

Real households’ disposable income (RHDI) per head rose by 1.7% in the fourth quarter, accelerating from 0.6% growth in the previous quarter.

The latest data adds to the stagnation concerns as households continue to accumulate cash at record levels.

The household savings ratio climbed from 10.3% to 12% in the final quarter of 2024, marking the highest level outside of the pandemic since 2010, following the financial crisis. Non-pension savings also reached their highest point on record, excluding the COVID period.

Grant Fitzner, chief economist at the ONS, said that the economy “continues to show little growth since last summer.”

GDP per head, a critical measure of living standards, fell by 0.1% between October and December, signaling a technical recession after two consecutive quarters of decline. Growth per head was flat across 2024.

The data comes after the Office for Budget Responsibility (OBR) on Wednesday trimmed its 2025 GDP growth forecast in half, from 2% to 1%. Chancellor Rachel Reeves said last week that “the world has changed,” attributing the weak outlook to global uncertainty and rising borrowing costs.

She reiterated on Wednesday that “the global economy has become more uncertain, bringing insecurity at home.”

Adding to the economic uncertainty, the UK and Europe face further challenges as U.S. President Donald Trump plans to introduce sweeping “reciprocal” tariffs on April 2, which he has dubbed “Liberation Day” for America.

Trump announced 25% tariffs on car imports to the U.S. on Wednesday, dealing a significant blow to British and European exporters.

In a separate report on Friday, the ONS revealed that British retail sales rose by 1% in February, exceeding expectations.

Data from the ONS showed that the volume of goods purchased outperformed economists’ forecasts of a 0.4% decline, according to a Reuters poll. However, the February increase was smaller than the 1.4% gain recorded in January.

In the three months to February, retail sales were up 0.3% compared to the previous three-month period.

The pound briefly strengthened after the positive data against the dollar, rising to $1.2952 by 08:03 GMT.

Source: Investing

To stay updated on all economic events of today, please check out our Economic calendar

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Warren Takunda

Economic

The 25% U.S. tariff announced for auto imports is raising a ruckus across the globe, from Tokyo and Seoul to Wolfsburg to Detroit, as car makers warn of price hikes and ponder shifting their manufacturing base to deal with the upheaval.

The shares of Japanese and South Korean automakers - pillars of the two powerhouse Asian economies - sank on Friday in a brutal end to the week.

Almost 3 trillion yen ($20 billion) has been wiped from the market value of Japan's top three carmakers - Toyota, Honda and Nissan- in three trading sessions this week.

Futures suggest European markets are looking at a dour Friday with the region's automakers stuck in the spotlight. The European automobiles and parts index was at its lowest level since early December and is poised for a sixth straight week in the red.

U.S. President Donald Trump's latest tariff salvo has drawn fierce criticism from politicians and industry executives across the globe. Wolfsburg, Germany-based Volkswagen said the entire automotive industry as well as customers will have to "bear the negative consequences".

It's decision time for car makers, who must now determine whether to localise more production in the U.S., swallow the costs of tariffs, or pass those costs on to consumers.

Volvo Cars, Volkswagen's Audi, Mercedes-Benz and Hyundai have already said they will relocate portions of their production.

Ferrari, which makes all of its cars in Italy, said it would raise prices of some models by as much as 10%.

It seems that all big automakers are facing an uncertain future. Well, almost all. Shares of Texas-based EV maker Tesla largely shrugged off the worries, as its production for the U.S. market largely comes from domestic plants, with less reliance than other automakers on foreign-made parts.

President Donald Trump's mercurial tariff policies have created uncertainty on Wall Street and continue to fuel fears of a global slowdown.

Investor attention is now turning to the reciprocal U.S. tariffs to be announced next week, with markets latching onto Trump's suggestion that the levies might be lenient. That leaves a lot of room for a surprise - either pleasant or nasty.

Amidst all this gloom, the rally in gold prices is showing no signs of letting up, cracking through yet another record high on safe-haven flows. Gold has stayed comfortably above $3,000 per ounce since breaching that threshold in mid-March.

The yellow metal has risen more than 17% in the January-March period, on course for its best quarterly performance since 1986.

Morning Bid: Tariff Carnage Rumbles On_1

A line chart titled "Spot gold price in USD per oz" that tracks the metric over time.

Key developments that could influence markets on Friday:

Economic events: UK GDP data for Q4, UK retail sales for February, France inflation data for March, Germany labour data for March, euro zone sentiment survey data for March.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

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James Riley

Technical Analysis

FundamentalOverview

The USD performance hasbeen mixed this week amid general uncertainty ahead of the April 2 tariffs planannouncement. The greenback got a bit of a boost recently as Trump announced25% tariffs on auto imports on Wednesday but those gains eventually waned.Overall, the market is still pricing between two to three rate cuts this yearand the sentiment remains tentative ahead of the Trump’s “Liberation Day”.

On the JPY side, we got higherthan expected Tokyo CPI figures today which gave the Yen a boost as traderscontinue to focus on the inflation data to decide whether the BoJ could hikemore than twice by the end of the year. Overall, the market is still pricingaround 34 bps of tightening by year-end with particular focus now on theunveiling of the US tariffs plan next Wednesday.

USDJPYTechnical Analysis – Daily Timeframe

USDJPY Daily

On the daily chart, we cansee that after breaking above the major trendline, the pair continued to drift higher.There’s not much else we can glean from this timeframe so we need to zoom in tosee some more details.

USDJPY TechnicalAnalysis – 4 hour Timeframe

USDJPY 4 hour

On the 4 hour chart, we cansee that we have an upward trendline defining the bullish momentum on thistimeframe. From a risk management perspective, the buyers will have a betterrisk to reward setup around the trendline to position for further upside. Thesellers, on the other hand, will look for a break below the trendline to regaincontrol and pile in for a drop into the 140.00 handle next.

USDJPY TechnicalAnalysis – 1 hour Timeframe

USDJPY 1 hour

On the 1 hour chart, we cansee that we have a minor upward trendline. On an intraday basis, we can expectthe buyers to lean on the trendline with a defined risk below it to positionfor a rally into new highs, while the sellers will look for a break lower to pilein for a drop into the major trendline next. The red lines define the average daily range for today.

Source: ForexLive

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Warren Takunda

Stocks

London stocks were set to fall at the open on Friday following negative sessions in the US and Asia, as investors continued to mull the impact of Trump’s auto tariffs.

The FTSE 100 was called to open around 20 points lower.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Sentiment remains sour due to intensifying tariff talk.

"The carmakers around the world got hammered this week as the ones that produce their cars outside the US will cost 25% more if the levies go live - and nearly half of vehicles sold in the US are reportedly assembled elsewhere - and, the ones that are made in the US have at least 20% of their components coming from outside the US."

On home shores, figures from the Office for National Statistics showed that retail sales rose more than expected in February.

Sales were up 1% on the month following a 1.4% increase in January, and versus expectations for a 0.4% decline.

January's growth was revised down from 1.7%.

The ONS said non-food store sales volumes grew strongly in February, with rises across all four sub-sectors - department, other non-food, clothing, and household goods stores - while supermarket sales volumes fell back following a strong rise in January.

In corporate news, WH Smith said it has sold its UK High Street business to Modella Capital for an enterprise value of £76m on a cash and debt-free basis.

The retailer, which will now focus on its travel outlets, said it expected net cash proceeds of around £25m when adjusted for transaction and separation costs, which would be spent in-line with the its capital allocation policy.

It added that the deal did not include the funkypigeon.com personalised online greeting card business where strategic options were now being considered, including a possible sale.

Energy group SSE said it has promoted its chief commercial officer Martin Pibworth to the CEO position, replacing current boss Alistair Phillips-Davies who will formally leave the company this summer.

Pibworth, who first joined SSE in 1998 and stepped up to the executive committee in 2012 and the board in 2017, “has been at the heart of the design and delivery of SSE’s highly successful corporate strategy”, SSE said.

Source: Poundsterlinglive

Risk Warnings and Disclaimers

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Warren Takunda

Stocks

Asian stocks were mostly lower Friday as investors mulled uncertainties brought by U.S. President Donald Trump’s latest tariffs.

Tokyo’s benchmark Nikkei 225 sank 2% to 36,920.84 on renewed heavy selling of auto-related shares following Trump’s announcement he plans to impose 25% tariffs on auto imports.

Toyota Motor Corp. shares lost 2.8% while Honda Motor Co. dipped 2.4%.

A report that Tokyo’s inflation rate rose to 2.9% this month spurred expectations that the Bank of Japan will likely raise its key interest rate at its May policy board meeting.

In South Korea, the Kospi sank 2% to 2,555.36. Hyundai Motor Co. lost 4% and Kia Corp.'s shares lost 3%.

Hong Kong’s Hang Seng turned lower, falling 0.6% to 23,436.01. The Shanghai Composite index lost 0.5% to 3,359.18.

Australia’s S&P/ASX200 edged 0.2% higher, closing at 7,982.00.

Taiwan’s Taiex tumbled 1.6% and Bangkok’s SET declined 0.5%.

On Thursday, Wall Street ended with modest losses as Trump’s tariff escalation created winners and losers among auto stocks. Better-than-expected data on the economy also helped support the market.

The S&P 500 slipped 0.3% to 5,693.31 and the Dow Jones Industrial Average fell 0.4% to 42,299.70. The Nasdaq composite fell 0.5% to 17,804.03.

General Motors sank 7.4%, one of the market’s sharper losses. Ford Motor dropped 3.9%.

Even U.S. automakers selling vehicles in the country can feel the pain of such tariffs because their supply chains are spread throughout North America and beyond. Trump says he wants more manufacturing to take place within the United States.

Among the uncertainties are how the U.S. government will determine how to apply tariffs to parts that are compliant with the free-trade agreement that the United States and Mexico and Canada have, but are not made entirely within the United States. Tracking parts could be difficult.

U.S. electric-vehicle makers Rivian and Tesla did better. They face less pressure from Trump’s tariffs because more of their production happens in the United States.

Rivian rallied 7.6%, and Elon Musk’s Tesla added 0.4% after paring an earlier, bigger gain.

Companies that could benefit from drivers opting against buying new cars also revved higher. Among auto parts retailers, AutoZone gained 4%, and O’Reilly Automotive climbed 3.1%. CarMax, which sells used autos, rose 2.5%.

Stock markets worldwide will likely remain shaky as an April 2 deadline approaches for more tariffs. That’s what Trump has called “Liberation Day,” when he will roll out tariffs tailored to the United States’ trading partners. In each case, he said the “reciprocal” tariff will match the burden the other country places on the United States, including things like value-added taxes.

“The burning question on every macro trader’s mind is: what’s really lurking behind the reciprocal tariff curtain?” Stephen Innes of SPI Asset Management said in a commentary.

Hopes are still high that Trump may ultimately opt for more targeted or milder tariffs that are less painful for the global economy than feared. But even if he does, all the talk about tariffs has already made U.S. consumers and businesses more cautious and pessimistic. If they pull back on their spending, that could hurt the economy.

So far, the economy has held steady.

One report Thursday said slightly fewer workers applied for unemployment benefits last week than economists expected. It’s the latest sign the job market may be settling into a “low fire, low hire” state.

A second report said the U.S. economy’s growth during the final three months of last year was slightly stronger than earlier estimated.

On Wall Street, Petco Health & Wellness jumped 31.6% after the retailer reported slightly stronger results for the latest quarter than analysts expected.

In other dealings early Friday, U.S. benchmark crude oil dipped 20 cents to $69.72 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, lost 22 cents to $73.12 per barrel.

The U.S. dollar dropped to 150.741 Japanese yen from 151.05 yen. The euro edged down to $1.0796 from $1.0804.

Source: AP

Risk Warnings and Disclaimers

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Isaac Bennett

Cryptocurrency

BNB Chain Dominates DeFi

The BNB Chain layer-1 has taken the top spot in the DeFi sector. New data shows it leads in both trading volume and fee generation. This high activity has driven more users to the network in the past week.

Since March 15, decentralized exchanges (DEXs) built on BNB Chain have controlled over 30% of the total DEX market. PancakeSwap accounts for more than 96% of this volume, making it the dominant DEX in the ecosystem. This six-day streak puts BNB Chain ahead of its competitors. The consistent performance strengthens BNB Chain's position as a leader in the DeFi space.

BNB Chain decentralized exchange volume (Defillama)

Record-Breaking Fee Generation

The network isn't just leading in trading volume. BNB Chain has also become the top blockchain for fee generation. Since March 17, it has collected more than $1.6 million in daily fees.

This fee generation reflects the high transaction volume on the network, which has processed approximately 6 million transactions daily since March 17. While fees have increased slightly, they remain relatively low compared to other networks. The combination of high transaction volume and modest individual fees has resulted in substantial total fee revenue, demonstrating the network's efficiency and popularity.

BNB Chain Daily Transactions (BscScan)

BNB Token Outperforms Bitcoin

The network's native token, BNB, has delivered more impressive returns than Bitcoin over the past week. While Bitcoin gained approximately 3% over the past seven days, BNB surged by about 8% during the same period - outperforming the market leader by more than double.

This outperformance is particularly notable given that Bitcoin typically serves as the benchmark for the entire cryptocurrency market. When altcoins outpace Bitcoin, it often signals specific ecosystem strength rather than just general market movement. BNB's position as both the native token of the world's largest cryptocurrency exchange (Binance) and the fuel for the BNB Chain ecosystem provides it with multiple sources of utility and demand.

Explosive Growth in BNB Chain-Based Projects

Meme Token Performance

Memecoin Projects built on BNB Chain have seen major gains in the past seven days. The most impressive performers include:

$TUT: This token leads the pack with a 5,995% price increase, making it the week's top performer on the network.
$BNBXBT: Coming in second place with a 363% increase in value.
$BINK: Rounding out the top three with a substantial 332% gain.
$Mubarak: Perhaps most impressive of all, this token achieved a 175,000% increase in its first six days, reaching $0.1284 it even went as high as $0.21 on March 18.

Infrastructure Token Growth

It's not just meme tokens seeing gains. Several infrastructure tokens with higher market caps have also posted significant growth:

$Cake: The popular DeFi token increased by approximately 60% over the past week.
$Form: Fourmeme/BinaryX has more than doubled its price during the same period.
$Bounce: Auction platform infrastructure token that grew by 64% in value.

What's Driving BNB Chain's Success?

Several factors contribute to BNB Chain's current market dominance:

Low fees compared to other competing chains make it attractive for DeFi users and traders.
Fast transaction processing allows for quick trades when markets move.
A growing ecosystem of applications gives users more reasons to use the network.
Strong development support from Binance and BNB Chain helps projects launch and grow.

Market Impact and Broader Significance

BNB Chain's success is sending ripples across the entire crypto landscape. Capturing over 30% of all DEX volume, it's not just growing - it's reshaping how DeFi operates. Users vote with their transactions, flocking to platforms delivering speed and affordability.

Unlike networks that charge high fees per transaction, BNB Chain has found the sweet spot - keeping costs low while still generating substantial revenue through sheer volume. Six million daily transactions add up, even when each one costs just pennies.

What's particularly striking is how the ecosystem simultaneously supports wild speculation and serious development. While meme tokens explode with 5,000%+ gains, infrastructure projects quietly double in value.

The network effect is becoming increasingly visible. Each new successful project makes the ecosystem more attractive, drawing in more developers and users. This creates a momentum that competitors may find more challenging to match as time goes on.

Conclusion: A Multi-Dimensional Success Story

The data points to a clear conclusion: BNB Chain is experiencing success across multiple dimensions simultaneously - transaction volume, fee generation, token performance, and project growth. The ecosystem's ability to maintain dominance in DEX trading while supporting everything from meme tokens with 175,000% gains to established infrastructure projects demonstrates a versatility that few blockchain networks have achieved.

As BNB Chain continues to process millions of daily transactions with a balanced economic model, it has positioned itself as a standard-setter and competitor in the blockchain space, one against which others will need to measure themselves.

Source: CryptoSlate

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Pound-to-Euro: EUR Running on the Fumes of Optimism

Source: Poundsterlinglive

UK Economy Grew 0.1% in Final Quarter of 2024, Fueling Stagnation Concerns

Source: Investing

Morning Bid: Tariff Carnage Rumbles On

A line chart titled "Spot gold price in USD per oz" that tracks the metric over time.

Source: Reuters﻿

USDJPY Technical Analysis – The JPY Gets A Boost From Higher Tokyo CPI Data

FundamentalOverview

USDJPYTechnical Analysis – Daily Timeframe

USDJPY Daily

USDJPY TechnicalAnalysis – 4 hour Timeframe

USDJPY 4 hour

USDJPY TechnicalAnalysis – 1 hour Timeframe

USDJPY 1 hour

Source: ForexLive

London Pre-Open: Stocks Seen Lower; Retail Sales in Focus

Source: Poundsterlinglive

Stock Market Today: Asian Stocks Skid as Investors Await More Trump Tariffs

Source: AP

BNB Analysis: Massive Growth And Outperforming BTC

BNB Chain Dominates DeFi

BNB Chain decentralized exchange volume (Defillama)

Record-Breaking Fee Generation

BNB Chain Daily Transactions (BscScan)

BNB Token Outperforms Bitcoin

Explosive Growth in BNB Chain-Based Projects

What's Driving BNB Chain's Success?

Market Impact and Broader Significance

Conclusion: A Multi-Dimensional Success Story

Source: CryptoSlate

Risk Disclosure

Source: Reuters