Last week, the financial market was full of news. US President Trump announced the latest tariff measures, the Russian-Ukrainian war made significant progress, and the Federal Reserve Chairman Powell testified in Congress to release important signals. In terms of economic data, US CPI and PPI data were higher than expected, but the "terror data" fell much more than expected. In terms of the market, the US dollar index fell more than 1% last week, falling for the second consecutive week. Gold prices plunged nearly $70 last Friday, but still rose for the seventh consecutive week and hit a record high of $2,942.70.

Last week, the three major stock indexes all recorded gains this week as investors gained more certainty about US President Donald Trump's tariff policy, and the latest inflation data ended up being more constructive than expected. The S&P 500 rose about 1.5% to close at 6,114.63 points. The Dow rose about 0.6% to close at 44,546.08 points. The Nasdaq rose 2.6%, the strongest performance. Closed at 20,026.77 points.

The gold market experienced dramatic price fluctuations last week. Although the price of gold fell back due to profit-taking and technical pressure, the overall performance was still on an upward trend. The spot gold price closed at around $2,885/oz, down slightly from the all-time high of $2,942.70/oz at the beginning of the week, but the cumulative increase this week was close to 0.8%. Although the price of gold suffered a correction this week, it still recorded a seventh consecutive week of gains, which undoubtedly reflects the strong support of the current market.

Last week, the price of silver was in the positive range for the third consecutive day, hitting a high of $32.950 since November last year. Growing concerns about the tariff policy of US President Donald Trump continue to support the white metal.

The US dollar faced strong pressure last week, and the US dollar index fell below the 107.00 mark. This decline was mainly affected by the latest statement of US President Trump on the possible implementation of a reciprocal tariff policy. The market is focusing more on the expected data of the S&P Global Purchasing Managers Index (PMI) to be released next week. The main risks facing the US dollar still come from policy uncertainty and global trade frictions.

It was another bad week for the US dollar, with the US dollar index falling back below the 107.00 area for the first time since mid-December. In fact, the US dollar index fell for the second consecutive week due to the lack of clarity on the White House's trade policy, while President Trump's erratic tariff announcements seemed to test the market's patience, all against the backdrop of growing skepticism.

The Japanese yen continued to benefit from the weak US dollar last week, with USD/JPY falling to 152.00 before losing the gains of the previous few days. The technical picture of USD/JPY shows more downward pressure, especially after breaking below the 200-day moving average. As market expectations for Fed rate cuts heat up, demand for the US dollar has declined, leading to the rise of the yen against the US dollar.

The British pound performed well last week, especially supported by the US retail sales data that was worse than expected. GBP/USD briefly broke through 1.2600, setting a recent high. Economic data from the UK also improved, with GDP performing better than expected. Despite the differences in monetary policy between the UK and the US, the British pound is supported by the weakness of the US dollar in the short term, which further drives the rise of the British pound. The technical picture of the British pound remains strong.

The euro performed strongly last week, driven by multiple factors. First, the euro rose to above 1.0500 against the dollar against the backdrop of a weak dollar, hitting a new high since January 27. Another major factor driving the euro's rise is the market's optimism about the situation in Russia and Ukraine. Trump's calls with Putin and Zelensky brought positive expectations for the peace agreement to the market, boosting investors' confidence in Europe's economic recovery.

The Canadian dollar continued to rise last week in an environment of a weaker dollar. USD/CAD fell below 1.4200. Although US economic data was relatively weak, the market still maintained a risk-taking attitude, pushing the Canadian dollar up. The rise of the Canadian dollar was mainly affected by the weakness of the US dollar, and the market was concerned about the performance of Canada's CPI data next week. If the CPI data is strong, it may further support the rise of the Canadian dollar.

The current AUD/USD usd ushered in a second consecutive week of gains, mainly affected by the news that US President Trump decided to postpone the implementation of mutual tariffs. At the same time, the US dollar weakened against the backdrop of a full-line decline in US Treasury yields, driving the AUD/USD exchange rate to strengthen. Although market concerns about global economic uncertainty remain, the news boosted market sentiment and prompted a rebound in the Australian dollar.

International oil prices fell for the fourth consecutive week, mainly affected by expectations of easing tensions between Russia and Ukraine. The market generally believes that if the Russian-Ukrainian peace talks make substantial progress, the lifting of sanctions on Russia will significantly improve global energy supply. However, the postponement of the implementation of reciprocal tariffs in the United States provided support for oil prices and limited the decline in oil prices. Brent crude oil futures closed at $774.54 per barrel, while WTI crude oil fell to $70.70 per barrel.

Bitcoin failed to return above $100,000 before the end of last week. The Sino-US trade war continued to hit the crypto market. Bitcoin pulled back to around $96,700. A new round of trade war actions exacerbated panic selling. US President Trump ordered agencies to investigate a new reciprocal tariff plan, which could trigger a global trade war and exacerbate the problem of a rebound in US inflation.

At present, the US economy and inflation have not shown signs of overheating and acceleration, which has reduced the market's pressure on rising interest rates. The recent downward trend of the 10-year US Treasury yield has not only improved market breadth, but also pushed up stock asset prices through market linkage effects. The 10-year US Treasury yield continued to decline, and the latest fell by nearly 5 basis points to 4.478%.

Outlook for this week:

Forecast this week: Federal Open Market Committee meeting minutes and Reserve Bank of Australia meeting will be the focus; despite the Fed's further assurance of its cautious monetary policy stance, the equally frustrating domestic data and the continued lack of clarity on tariffs have led to another disappointing weekly performance of the US dollar, pushing it to the level of early December 2024.

The short-term trend of the US dollar index will still be affected by Trump's tariff remarks and the upcoming economic data. As the Fed's policy expectations become clearer in the coming weeks, the medium-term trend of the US dollar will be more dependent on inflationary pressures and the performance of economic data. If the S&P PMI data this week is weak, coupled with the Fed's continued maintenance of a higher interest rate environment, the downward pressure on the US dollar may increase. In the coming weeks, investors should focus on the progress of Trump's tariff policy and changes in US economic data, especially the upcoming PMI and the direction of the Fed's policy.

The trade friction between the United States and the European Union will inevitably have a greater impact on the foreign exchange market, especially the fluctuation of the euro against the US dollar. The euro/dollar is currently fluctuating around 1.05. If the United States further imposes tariffs and fails to reach an agreement with the European Union, the US dollar may climb in the short term, causing the euro to depreciate. However, if the European Union takes effective countermeasures or the United States and the European Union reach an agreement to resolve the trade dispute, the euro may break through the current upward resistance and continue to rise.

Despite the differences in monetary policies between the United Kingdom and the United States (the Federal Reserve expects that interest rates may be cut this year, while the Bank of England is more hawkish), the pound is supported by the weakness of the US dollar in the short term, which further promotes the rise of the pound. The market is concerned about the possibility of a rate cut by the Federal Reserve. The recent relatively good economic performance of the United Kingdom, especially the strong performance of GDP data, may continue to support the pound.

Although the US dollar against the yen may continue to fluctuate in the short term, the trend of the yen still needs to be closely watched due to Trump's tariff remarks and the uncertainty of the global trade environment. In the coming weeks, the US dollar against the yen is likely to fluctuate within a range. In general, the medium-term trend of USD/JPY will depend more on the changes in the US bond market and the direction of Trump's tariff policy, and investors should pay close attention to these factors. After the market further digests the impact of tariff risks and US economic data, the trend of USD/JPY may become clearer.

Although the current market sentiment tends to be bullish, there is still some uncertainty on the technical side. The market is closely watching whether the AUD/USD exchange rate can successfully break through the resistance level and whether it can maintain above the key support level. Breaking through the current technical level may lead to greater fluctuations. The current strong rebound of the Australian dollar provides opportunities for short-term trading, but it still faces potential market risks and technical pressures, and under the dual influence of the upcoming US retail sales data and the Reserve Bank of Australia's policy decision, the trend of AUD/USD is still full of variables.

Looking forward to this week, the gold market still faces a relatively complex situation, and market sentiment will be affected by multiple factors. From a fundamental perspective, Trump's reciprocal tariff policy will continue to have an impact on gold. Although the specific details of the tariff implementation have not yet been clarified, market concerns about inflationary pressures are expected to continue to push up the safe-haven demand for gold.

The crude oil market will still face the test of multiple uncertainties this week. First, whether the Russian-Ukrainian peace talks can make substantial progress will be an important factor affecting oil prices. If the situation between Russia and Ukraine eases and sanctions against Russia are lifted, global energy supply may ease and oil prices may be under great pressure. Secondly, whether the Trump administration's reciprocal tariff policy will continue to be postponed and its impact on global trade may continue to affect market sentiment. The market's expectations for the adjustment of the US trade policy are still relatively optimistic, which may provide some support for oil prices in the short term.

Conclusion :

Overall, the weak performance of the US dollar last week was mainly driven by poor economic data and the market's rising expectations for the Fed's interest rate cut. Although Trump's decision to postpone tariffs has eased market concerns in the short term, the outlook for the Fed's monetary policy will remain the focus of the market. Major currencies such as the euro, pound and yen have performed relatively strongly against the backdrop of a weaker dollar, but market uncertainty remains high, and attention should be paid to data releases and changes in the global political and economic situation in the coming weeks.

Although the crude oil market experienced a slight correction last week, oil prices are still affected by multiple factors, including the recovery of global demand and uncertainty in oil supply. In the short term, the crude oil market may remain volatile, but fluctuations in market sentiment may provide short-term opportunities for oil prices.

Technically, the pullback in gold prices may not mean a reversal of the trend, but a short-term adjustment after the market's profit-taking. If the gold price can remain above $2,850/ounce, it is still expected to break through the previous historical high in the short term. If this position is lost, it may trigger a further correction, but considering the current fundamental support, the downward space for gold prices is limited.

Overview of important overseas economic events and matters this week:

Monday (February 17): US stocks closed for one day, the euro zone's December seasonally adjusted trade account

Tuesday (February 18): The Reserve Bank of Australia announced its interest rate decision, France's January CPI final value, Canada's January CPI data, Germany/Eurozone February ZEW economic sentiment index

Wednesday (February 19): The Reserve Bank of New Zealand announced its interest rate decision and monetary policy statement, the UK's January CPI data, and the euro zone's December seasonally adjusted current account

Thursday (February 20): The Federal Reserve announced the minutes of the January monetary policy meeting, Germany's January P PI data, US February Philadelphia Fed manufacturing index, Eurozone February consumer confidence index preliminary value, US January Conference Board leading indicators, Philippine central bank interest rate decision, Turkish central bank interest rate decision

Friday (February 21): Japan January CPI data, France/Germany/Eurozone February manufacturing/service/composite PMI preliminary values, UK February manufacturing/service/composite PMI preliminary values, US February S&P Global manufacturing/service/composite PMI preliminary values, US February University of Michigan consumer confidence index final value


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