Global forex markets entered a state of calm on Friday, with major currency pairs trading in narrow ranges. With most major financial centers closed in observance of Good Friday, trading volume has thinned considerably, leading to a subdued environment as the Easter holiday weekend begins. The economic calendar is notably quiet as well, with no significant data releases scheduled, further contributing to the low volatility across the board.
ECB Cuts Rates by 25 Basis Points Amid Uncertain Economic Outlook
In one of the key developments this week, the European Central Bank (ECB) announced a 25 basis point rate cut following its April policy meeting, a move that had been broadly expected by market participants. ECB President Christine Lagarde, during her post-meeting press conference, struck a cautious tone, noting that the economic outlook for the Eurozone remains clouded by uncertainty. Lagarde refrained from offering clear guidance on the future trajectory of monetary policy, opting instead for a data-dependent approach.
The euro reacted negatively to the announcement, with EUR/USD slipping lower and closing Thursday’s session in negative territory. As Friday trading commenced, the pair remained confined to a tight range just above the 1.1350 mark, reflecting the broader lack of conviction in the market.
US Labor Market Remains Resilient; Trade Tensions in Focus
Across the Atlantic, the US reported encouraging labor market data. Weekly Initial Jobless Claims fell to 215,000, down from the prior week’s revised 224,000, suggesting that the labor market continues to show resilience despite broader economic uncertainties.
Meanwhile, trade developments once again captured market attention. US President Donald Trump commented on Thursday that China had reached out to the US administration to restart negotiations on tariffs. Trump expressed optimism, stating he believed a deal with China was achievable. The news offered modest support to the US Dollar (USD), with the USD Index (DXY) edging higher to close near 99.50, where it remained stable early on Friday.
Gold Hits New Highs Before Profit-Taking Sets In
Gold prices continued their impressive rally this week, with XAU/USD reaching a new record high of $3,357 during Thursday’s Asian session. The surge was fueled by safe-haven demand amid lingering geopolitical tensions and expectations of more accommodative central bank policies worldwide. However, the precious metal faced some selling pressure in the second half of the day, likely due to profit-taking ahead of the long weekend. As a result, gold prices pulled back slightly, closing the week around $3,327.
Sterling Finds Support; Yen Struggles
The British Pound (GBP) managed to end Thursday’s session on a positive note, buoyed by a weakening USD and a generally improved risk appetite. GBP/USD pushed higher toward the 1.3280 level before entering a consolidation phase, where it remained stable heading into the Friday session.
In contrast, the Japanese Yen (JPY) struggled to find meaningful support. USD/JPY continued to trade within a narrow band below 142.50, staying on track to post its third consecutive week of losses. Bank of Japan Governor Kazuo Ueda reiterated on Friday that the BOJ would continue to raise interest rates if underlying inflation showed signs of sustainably moving toward the 2% target. However, the yen remained weak as traders weighed Ueda’s cautious tone against the broader strength of the dollar.
Looking Ahead: Cautious Trading to Continue
With most major markets closed today and no key economic reports scheduled, trading is expected to remain light and range-bound throughout the rest of the day. Investors and traders will likely wait until next week for fresh catalysts, including new economic data releases and further developments on the geopolitical front.
In the meantime, market participants are keeping a close eye on technical levels, as thinner liquidity conditions could amplify price movements even on minor headlines. The subdued tone of today’s session offers a moment of calm after an eventful week in global markets, setting the stage for what could be a volatile return to action after the Easter holiday.
