What happen weekly in forex market?

Global Markets
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The EUR/USD currency pair has experienced a slight recovery, paring its weekly losses as U.S. equities performed strongly. A significant factor in the currency’s movements was the remarks by Federal Reserve officials emphasizing a restrictive monetary policy stance. Richmond Fed President Thomas Barkin expressed optimism for the U.S. economy in 2025, with upside growth potential outweighing downside risks. These sentiments contributed to increased investor confidence in the greenback.

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Interesting! The Fed’s stance definitely keeps the USD strong but I wonder how long can the EURUSD hold its recovery, given that the US economy may outpace the expectations.

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NZD/USD Gains and USD/CAD Recovers Amid Trump’s Tariffs.

KEY HIGHLIGHTS

  • EUR/USD Dips Amid Tariff Tensions and Economic Data.
  • GBP/USD Climbs as Dollar Weakens, Retail Sales Surge.
  • NZD/USD Gains Amid Tariff Policy Uncertainty and PMI.
  • USD/CAD Recovers Amid Trump’s Tariffs and Trudeau Speculation.

INTRODUCTION

The forex market is experiencing notable movements as traders react to renewed uncertainty surrounding U.S. tariff policies and significant economic data releases. The NZD/USD and USD/CAD pairs are in focus, with the former gaining ground and the latter recovering amid political and economic developments. President-elect Donald Trump’s reaffirmation of his tariff plans has injected volatility into the currency markets, alongside mixed economic indicators from major global economies.

NZD/USD Records Gains Amid Tariff Uncertainty

The NZD/USD pair is trading near 0.5640, recording modest gains during Tuesday’s Asian session. A weaker U.S. Dollar (USD) and robust economic data from China are providing support for the New Zealand Dollar (NZD).

  • Market Drivers:

    • U.S. Tariff Plans: Reports from the Washington Post suggest that Trump’s tariff strategy might narrow to focus on critical goods and services, adding uncertainty to the market.
    • Chinese Economic Data: The Caixin PMI showed a seven-month high in China’s services activity for December, signaling economic resilience. This has positive implications for the NZD, given New Zealand’s strong trade ties with China.
    • Federal Reserve Commentary: Hawkish remarks from Fed Governor Lisa Cook emphasized caution in further rate cuts, citing persistent inflation pressures. These comments could provide temporary support for the USD.

  • Technical Analysis:

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