China Manufacturing PMI Hits 12-Month High Amid Energy Price Concerns 
South Korea Manufacturing PMI Hits 4-Year High in March 2025 Driven by Semiconductor Demand 
Dollar Surges to Monthly High as Middle East Conflict Rattles Global Markets 
Japan Business Sentiment Rises as Iran War Fuels Inflation Fears, BOJ Rate Hike Looms 
U.S. Stocks Surge on Iran War De-escalation Hopes 
Iran Strikes Oil Tanker Near Dubai Amid U.S. Threats and Ongoing Middle East Conflict 
Canada's Economy Grows Modestly in January 2025, Driven by Energy and Construction 
Bank of Korea Nominee Shin Hyun-song Calls for Flexible Monetary Policy Amid Iran War Risks 
Bessent: Global Oil Market Well Supplied as U.S. Eyes Hormuz Navigation Control 
Asian Currencies Hold Steady Amid U.S.-Israel-Iran Tensions and BOJ Signals 
South Korea's Exports Hit Record High in March on AI-Driven Chip Demand 
Oil Prices Dip as Trump Eyes Iran De-escalation, Hormuz Closure Persists 
U.S. Stock Futures Surge After WSJ Report on Trump's Iran War Exit Strategy 
Gold Prices Rebound But Head for Worst Month Since 2008 Amid Iran War Uncertainty 
U.S. Trade Rep Dismisses WTO's Future Role After Failed Cameroon Summit 
RBC Capital: European Medtech Firms Show Minimal Middle East and Energy Risk Exposure 
Goldman Sachs Sees Value in European Real Estate Stocks Despite Sharp Selloff 
Dollar Strengthens Amid Fed Rate Uncertainty and Middle East Tensions
The US dollar surged to a seven-week high against major currencies, driven by evolving expectations for US interest rates and rising tensions in the Middle East. A robust US jobs report last week reduced the likelihood of significant Federal Reserve rate cuts, influencing market sentiment.
Fed Rate Cut Expectations Shift
Investors have adjusted their predictions for Federal Reserve rate cuts. According to the CME FedWatch tool, markets now see an 86% probability of a 25 basis points (bps) cut in November, with December easing expectations lowered to 50 bps from over 70 bps a week prior. This shift has strengthened the dollar against the euro, yen, and sterling.
Forex Market Trends
The dollar index, which measures the USD against major currencies, stood at 102.41, slightly below Friday's seven-week high of 102.69. Traders are factoring in a "no landing" scenario, with strong economic data supporting a cautious Fed approach to rate cuts.
Global Currency Movements
The euro traded at $1.0981, while the pound was at $1.3095, both near recent lows. The yen, which fell to a seven-week low of 149.10 per dollar, recovered slightly to 147.795 following remarks from Japanese officials expressing caution over future rate hikes.
Looking Ahead
Investor focus will now turn to the upcoming US inflation report and the Federal Reserve’s September meeting minutes, as well as key monetary policy decisions from New Zealand and China's reopening after the holidays.
