Global markets on March 13, 2025, shaped by a subdued US Dollar and escalating concerns over a potential trade war

Moneta Markets Daily Global Market Update

Global markets on March 13, 2025, are shaped by a subdued US Dollar and escalating concerns over a potential trade war, driven by new tariffs under the Trump administration. Investors are adopting a cautious stance, with safe-haven assets gaining traction and attention turning to the upcoming US Producer Price Index (PPI) inflation data, which could steer market direction later today. Below is a detailed breakdown of key market movements.

AUD/USD Holds Steady Amid Trade War CautionCurrent Level: The Australian Dollar (AUD) is trading steadily above 0.6300 against the US Dollar (USD) during Thursday’s Asian session.Supporting Factors: A broadly weaker US Dollar provides support, reflecting a risk-off sentiment in global markets.Key Concerns: Escalating trade tensions, particularly with new US tariffs (25% on Canadian and Mexican products, 20% on Chinese imports), are raising fears of a broader trade war. As Australia’s largest trading partner, a slowdown in China could dampen demand for Australian commodities, pressuring the AUD.What to Watch: The US PPI inflation data, due later today, is anticipated to offer fresh impetus. Softer inflation could reinforce expectations of Federal Reserve rate cuts, potentially weakening the USD further and supporting AUD/USD. Crypto Trading Volume Declines, Reflecting Market FatigueMarket Trend: Cryptocurrency trading volume has been dropping since its peak on February 27, according to Santiment data, signaling waning trader enthusiasm and diminishing market momentum.Capitalization Loss: The total crypto market capitalization has shed $1.01 trillion since January, falling from $3.69 trillion to $2.69 trillion.Implications: The decline in volume, even amid minor price recoveries, suggests cautious sentiment. Traders appear hesitant to engage, awaiting stronger signals of a sustainable uptrend. For a healthier recovery, rising prices need to be accompanied by increasing volumes, a condition yet to materialize. Japanese Yen Strengthens, USD/JPY Nears 148.00Current Movement: The Japanese Yen (JPY) is edging higher against the USD, dragging the USD/JPY pair closer to 148.00 in Thursday’s Asian session.Driving Forces:Safe-Haven Demand: Concerns over a global trade war, fueled by Trump’s tariff policies, bolster the Yen’s safe-haven appeal.Hawkish BoJ Outlook: Expectations of further rate hikes by the Bank of Japan (BoJ), supported by rising wages and broadening inflation, keep Japanese government bond yields elevated, narrowing the rate differential with other countries.USD Pressure: A weaker USD, hovering near multi-month lows amid Fed rate-cut bets, limits upside for USD/JPY. Traders are monitoring the 148.00 level as a key support, with potential for further declines if risk aversion intensifies. GBP/USD Remains Strong Near Four-Month HighsCurrent Level: The British Pound (GBP) is holding firm above 1.2950 against the USD, trading near four-month highs around 1.2960 during the Asian session.Supporting Factors:USD Weakness: Ongoing tariff uncertainty and cooling US inflation (February CPI at 2.8% YoY) fuel expectations of Fed rate cuts, pressuring the USD.UK Resilience: Despite a drop in the RICS Housing Price Balance to 11% in February, the Pound remains robust, supported by expectations that the Bank of England (BoE) will maintain higher rates longer, with UK 10-year gilt yields hitting 4.68%.Next Steps: Traders are eyeing a potential breakout above recent highs, with Friday’s UK GDP data providing further insight into economic strength. Gold Targets Record Highs Amid Trade War FearsCurrent Trend: Gold prices (XAU/USD) are building on recent gains, climbing to a two-week high and aiming to retest lifetime highs of $2,956 during Thursday’s Asian session.Driving Forces:Bullish Setup: A strong technical outlook supports gold’s upward momentum, with the price resting above the 20 SMA at $2,912.50 and the RSI at 60.Safe-Haven Appeal: Rising trade tensions, including new US tariffs and retaliatory measures from Canada and the EU, enhance gold’s status as a hedge against economic uncertainty.USD Influence: Persistent USD weakness, driven by softer-than-expected US inflation data, further boosts gold’s appeal. A break above $2,941.40 could pave the way for a challenge of the $2,956 peak. Broader Market ContextMarkets on March 13, 2025, reflect a cautious tone, with the US Dollar under pressure and safe-haven assets like the Japanese Yen and gold gaining favor. The AUD/USD pair remains stable above 0.6300, while GBP/USD holds strong near its four-month highs. In contrast, the cryptocurrency market shows signs of fatigue with declining trading volumes. The upcoming US PPI inflation data is poised to be a pivotal event, potentially injecting volatility and shaping the near-term trajectory of these markets. Investors remain on edge as they assess the broader implications of a Trump-induced trade war on global economic prospects.