23/04/2025 - 06:19 UTCFollowing a fifth consecutive week of decline, where the U.S. dollar index (USDX) hovered around February 2022 levels amid waning trader confidence and President Trump's renewed criticism of Fed Chair Powell, the dollar experienced a moderate recovery on Tuesday. The USDX climbed by 0.62% on the iFOREX platform. President Trump alleviated market anxieties by expressing his support for Federal Reserve (Fed) Chair Jerome Powell, clarifying that reports of his intention to dismiss Powell were unfounded. He stated his desire for Powell to be "a little more active" in pursuing lower interest rates. Trump also reiterated his desire to reach a trade agreement with China, suggesting that tariffs would be significantly lower than the previously mentioned 145%, but clarified that the terms would be dictated by the U.S. if China did not enter negotiations.
This recovery in the dollar coincided with the United States preparing its terms for trade negotiations with the United Kingdom. Washington's objectives include pressing London to reduce levies and non-tariff barriers on a wide array of U.S. goods. Specifically, the Trump administration intends to push for a reduction in the UK's automotive tariff from 10% to 2.5%. Furthermore, the U.S. will advocate for relaxed rules on agricultural imports, including beef, and revised rules of origin for goods traded between the two nations. On Tuesday the GBP/USD retreated from a seven-month peak of 1.3424 to end the session 0.8% lower on the iFOREX platform. The pound weakened as investors displayed renewed interest in U.S. assets.
While U.S. Treasury Secretary Scott Bessent recognized the potential for lengthy U.S.-China trade negotiations, his optimistic outlook, combined with President Trump's positive comments regarding Fed Chair Powell, spurred a significant market sentiment reversal; this shift propelled the Japan 225 to a 3.15% gain on Tuesday, and further fueled positive momentum into Wednesday, with the China SZSE rising nearly 1% and the Hong Kong 50 trading over 2% by 06:30 AM GMT.
Fueled by Treasury Secretary Scott Bessent's optimistic signals, the main U.S. stock indices experienced significant gains on Tuesday, with the US 500 rising by 3.98%, the US 30 by 3.91%, and the US Tech 100 surging by 4.21%. In corporate news, Verizon Communications saw a modest 0.56% increase despite reporting a greater-than-expected decline in retail phone customers due to a shift away from aggressive promotions, while 3M Company's stock soared by over 8% following first-quarter results that surpassed expectations due to organic sales growth and improved margins; conversely, Halliburton Company shares fell by 5.48% as lower North American drilling activity impacted its profits, and Kimberly-Clark's stock declined by 1.55% after the company lowered its annual profit forecast, citing increased supply-chain costs from broad-based trade tariffs; Amazon, rebounding from earlier losses, rose by 3.51% despite pausing some data center investments.
Investors are eagerly awaiting earnings reports from Alphabet, IBM, Philip Morris, and AbbVie. Later today, market attention may shift to the Eurozone, U.K., and U.S. Flash Manufacturing and Services PMIs, as well as U.S. New Home Sales figures.
The EUR/USD pair ended the session on Tuesday with moderate losses amid renewed demand for the US Dollar (USD). The Greenback regained momentum after US President Donald Trump clarified that he had no plans to dismiss Federal Reserve Chair Jerome Powell, despite expressing frustration over the central bank's pace in cutting interest rates.
Adding to the USD’s strength were fresh signals from the White House suggesting progress in trade negotiations. Press Secretary Karoline Leavitt announced Tuesday that 18 countries have submitted trade proposals to the US, and Trump’s trade team is currently engaging with representatives from 34 nations.
Further bolstering the dollar, hawkish remarks from Federal Reserve officials reinforced expectations that US interest rates will remain steady in the near term. Fed Governor Adriana Kugler stated late Tuesday that larger-than-expected import tariffs are likely to stoke inflationary pressures, indicating that the central bank should maintain its current policy stance until inflation risks subside.
Looking ahead, investors will closely watch the preliminary readings of the HCOB Purchasing Managers’ Index (PMI) for April from both the Eurozone and Germany, set to be released later on Wednesday. In the US, attention will turn to the flash S&P Global Manufacturing and Services PMIs for April, which are also due for release today.
Gold prices declined notably on Tuesday, weighed down by improved market sentiment and reassurances from US President Donald Trump regarding the Federal Reserve.
The drop follows President Trump’s latest comments, in which he clarified that he has no intention of removing Federal Reserve Chair Jerome Powell. “The press runs away with things,” Trump said. “No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.”
Sentiment was further buoyed by remarks from US Treasury Secretary Scott Bessent, who indicated progress in US-China relations and noted signs of de-escalation.
As markets assess shifting macroeconomic narratives, gold may remain volatile, balancing between improving risk sentiment and enduring geopolitical and inflationary concerns.
Oil prices surged on Tuesday, recovering from the previous session’s sharp losses as new U.S. sanctions on Iran and a rebound in global equity markets helped restore investor confidence.
Monday’s selloff saw both benchmarks drop over 2%, weighed down by signs of progress in nuclear talks between the U.S. and Iran, as well as sharp declines in equities following renewed criticism of Federal Reserve Chair Jerome Powell by President Donald Trump.
The mood shifted on Tuesday after the U.S. imposed fresh sanctions on Iran, specifically targeting a major Iranian liquefied petroleum gas and crude oil shipping magnate and his corporate network. These measures reignited concerns over a potential decline in Iranian oil exports.
On the supply side, market sentiment was further buoyed by a reported decline in U.S. crude inventories. According to sources citing data from the American Petroleum Institute (API), crude stocks fell by nearly 4.6 million barrels last week. The official data from the U.S. Energy Information Administration (EIA) is scheduled for release later today.
U.S. stocks surged on Tuesday, recouping losses from the previous session, as comments from Treasury Secretary Scott Bessent rekindled hopes for a potential easing in U.S.-China trade tensions. Gains were further supported by a strong showing from corporate earnings.
While Bessent’s remarks lifted market spirits, Federal Reserve officials continued to weigh in on the implications of trade policy. Minneapolis Fed President Neel Kashkari warned that the ongoing tariffs risk triggering a recession, citing declining business confidence.
The earnings calendar remained active, with several high-profile companies releasing quarterly results. 3M Company jumped 8% after beating Q1 expectations, driven by solid organic growth and improved operating margins. Halliburton fell more than 5.6% as the oilfield services giant reported weaker profit due to slowing drilling activity in North America.
Mizuho lowered its Tesla price target to $325 from $375 but kept an Outperform rating after the EV maker's weaker-than-expected Q1 earnings. The brokerage still sees cheap models and robotaxis as key drivers for Tesla's future, despite the earnings miss ($0.27 EPS vs. $0.44 est., $19.3B revenue vs. $21.4B est.) and a now-expected 8% decrease in 2025 deliveries.
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