Today’s Headlines:

• US Assets Fall Out of Favour: Investors are stepping back from US investments as global sentiment shifts.

👉 Could this signal a changing view on the US economy—and how might that impact your portfolio?

• Euro Strength Surges to Multi-Year Highs: The euro index has climbed to its highest level in four years, reflecting renewed confidence in the eurozone.

👉 How could a stronger euro affect travel, imports, or your overseas payments?

Market Recap: Markets Struggle to Find Direction as US Dollar Weakens

The US dollar continued to slide after US inflation data came in cooler than expected for March. Core inflation only rose 0.1% from February—the slowest monthly increase in nine months. This gave markets more reason to believe that interest rate cuts are back on the table, with expectations now reaching up to 90 basis points of cuts by the end of the year.

As confidence in US assets fades, stocks have started giving back nearly half of their recent gains since the 90-day tariff pause. US government bonds are also seeing outflows. In contrast, the euro strengthened notably, with EURUSD climbing to its highest level since July 2023. GBPEUR dropped to its lowest since January, while investors shifted toward currencies like CHF, EUR, and JPY—often seen as safer during uncertain times.

🔍 Key Takeaways from the Latest Market Moves

Markets Digest Mixed Signals: USD Slips, GBP Data Surprises, and EUR Stands Strong

📉 Dollar Under Pressure

The US dollar weakened as investors turned to traditional safe-haven currencies like the Swiss franc (CHF), euro (EUR), and Japanese yen (JPY). A softer-than-expected inflation report (CPI) added to the pressure.

👉 What would it take to rebuild confidence in the USD—and how could that impact your international spending or investments?

📊 Can PPI Turn the Tide?

With the dollar slipping, attention now shifts to the Producer Price Index (PPI). Only a significantly strong reading could help support the USD in the near term.

👉 Could higher input costs lead to inflation pressures returning later this year?

📈 UK GDP Surprises to the Upside

The UK economy grew 0.5% in February—well above forecasts—thanks to gains in services and manufacturing. Despite this, the pound’s reaction was limited, partly due to broader economic concerns and a downgraded growth outlook.

👉 Does this growth hint at a stronger UK recovery, or are markets still playing it safe?

💶 Euro’s Changing Role

Interestingly, the euro is being treated more like a safe-haven than a risk currency—helped by Germany’s pivot toward growth policies and the EU’s measured stance on tariffs.

👉 Is the euro becoming the new stabiliser in global markets?

📉 Overbought or Just Strong?

While technical indicators suggest the EUR, CHF, and JPY might be overbought, sentiment alone may not be enough to drive a reversal. The euro is now trading at multi-year highs.

👉 Is a correction coming—or has the narrative around the euro fundamentally changed?

11th April 2025

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