The global currency markets on March 13, 2025, are navigating a complex landscape shaped by recent geopolitical events, economic data releases, and shifting market sentiments. Major currency pairs such as EUR/USD, GBP/USD, USD/JPY, and USD/CHF are experiencing notable movements influenced by these developments.
Geopolitical Developments and Trade Policies
U.S. Tariffs and Global Reactions
On March 12, 2025, President Donald Trump imposed 25% tariffs on steel and aluminum imports, aiming to protect domestic industries. This action has elicited varied responses globally. Canada announced reciprocal tariffs on $30 billion worth of U.S. imports, while the European Union plans countermeasures on €26 billion of U.S. goods starting in April. Other nations, including Australia and the UK, have adopted a more cautious stance, opting for negotiations over immediate retaliation.
Impact on Currency Markets
The announcement of these tariffs has heightened concerns about a potential global trade war, leading to increased volatility in currency markets. The U.S. dollar has come under pressure as investors weigh the implications of escalating trade tensions on the U.S. economy.
Economic Data Releases
United States
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Producer Price Index (PPI): The U.S. PPI data for February is scheduled for release today. Market participants are closely monitoring this release to gauge inflationary pressures, which could influence the Federal Reserve’s monetary policy decisions.
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Unemployment Claims: Weekly unemployment claims data is also expected today, providing insights into the labor market’s health.
Eurozone
- Industrial Production: The Eurozone’s industrial production figures for January are set to be released. These numbers will offer a glimpse into the region’s manufacturing sector performance amid ongoing geopolitical uncertainties.
United Kingdom
- RICS House Price Balance: The Royal Institution of Chartered Surveyors’ house price balance for February is due, shedding light on the UK’s housing market trends.
Major Currency Pairs Analysis
EUR/USD
The EUR/USD pair has been trading near a five-month peak, supported by optimism over a potential resolution to the Ukraine conflict and despite complex fiscal policy developments in Germany. Investors are awaiting the Eurozone’s industrial production data for further direction.
Technical Levels:
- Support: 1.1050
- Resistance: 1.1200
GBP/USD
The British pound has shown resilience amid domestic economic challenges. The upcoming RICS house price balance data could provide additional insights into the UK’s economic health, potentially influencing the GBP/USD pair.
Technical Levels:
- Support: 1.3100
- Resistance: 1.3250
USD/JPY
Historically, March has been one of the stronger months for USD/JPY, raising hopes of a bounce after February’s downturn. However, current trade tensions and U.S. economic uncertainties may dampen this seasonal trend.
Technical Levels:
- Support: 112.50
- Resistance: 114.00
USD/CHF
The USD/CHF pair has been relatively stable, with the Swiss franc maintaining its safe-haven appeal amid global uncertainties. Investors are closely monitoring U.S. economic data releases for cues on future movements.
Technical Levels:
- Support: 0.9200
- Resistance: 0.9350
Outlook for Traders
Traders should exercise caution amid heightened volatility driven by geopolitical developments and upcoming economic data releases. Close monitoring of U.S. PPI and unemployment claims, Eurozone industrial production, and UK housing data is essential for informed decision-making. Additionally, staying abreast of further announcements regarding trade policies and potential retaliatory measures will be crucial in navigating the forex markets in the coming days.
