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WTI Slides Below $61.00 Amid Ongoing Trade Tensions
West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is trading near $60.80 in early Wednesday trading during the Asian session. The commodity remains under pressure as market participants weigh the impact of U.S. President Donald Trump’s latest tariff measures.
On Monday, the Organization of the Petroleum Exporting Countries (OPEC) revised its global oil demand forecast downward, citing increasing uncertainty linked to the United States’ unpredictable trade stance. This was followed by the International Energy Agency (IEA) on Tuesday, which forecasted the slowest growth in global oil demand since 2020, largely due to the economic slowdown triggered by heightened tariff tensions.
Since Trump’s announcement of sweeping tariffs on April 2, WTI has declined over 14%. Adding to the bearish sentiment, OPEC+ has confirmed plans to ramp up oil production starting in May, despite anticipating weaker demand and softer global economic growth.
Meanwhile, the latest weekly report from the American Petroleum Institute (API) showed a surprising build in U.S. crude inventories. For the week ending April 11, stockpiles rose by 2.4 million barrels, reversing the previous week’s decline of 1.057 million barrels and defying market expectations of a 1.68 million barrel draw. Year-to-date, U.S. crude oil inventories have increased by more than 24 million barrels, according to API figures.
GBP/USD Surges to Fresh Six-Month Highs Near 1.3250 Ahead of Key UK CPI Release
The GBP/USD pair is extending its bullish run that began on April 8, currently hovering around the 1.3250 mark during Wednesday’s Asian trading hours. Earlier in the session, the pair briefly reached a new six-month high of 1.3256. The ongoing rally is supported by improving global risk appetite, particularly after U.S. President Donald Trump announced exemptions for key tech products from newly proposed reciprocal tariffs.
On the domestic front, UK labor market figures released Tuesday showed the unemployment rate holding steady at 4.4% in February, aligning with market expectations. However, wage growth remained resilient, adding to the pressure on the Bank of England (BoE) to stay cautious on policy easing.
Despite strong wages, the BoE has yet to lower interest rates. Still, market pricing indicates a high probability—around 90%—of a rate cut in May, with traders also factoring in two more potential cuts before year-end.
Investors are now awaiting the UK’s Consumer Price Index (CPI) report for March, due later today. The core CPI, which excludes volatile food and energy prices, is expected to remain unchanged at 3.5% year-over-year.
Meanwhile, the US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, is under pressure, trading near 99.80. Attention will soon turn to upcoming US Retail Sales data for March, which may provide fresh signals on consumer activity amid ongoing tariff uncertainty.
Gold Nears $3,300 as Safe-Haven Demand Remains Strong
Gold prices (XAU/USD) surged to new all-time highs during Wednesday’s Asian session, edging closer to the psychological $3,300 mark. The rally is fueled by persistent safe-haven demand as fears of a prolonged US-China trade war and a potential US recession continue to unsettle global markets. Speculation that the Federal Reserve may cut interest rates up to four times this year is also supporting the non-yielding precious metal.
The US Dollar, meanwhile, struggles to recover from last week’s drop to its lowest level since April 2022, despite growing expectations of aggressive Fed easing. This has further bolstered gold’s upward momentum, which appears unaffected by overbought technical indicators. Investors now turn their attention to upcoming comments from Fed Chair Jerome Powell for clarity on future rate moves—key for short-term USD and gold price direction.
Market Movers Snapshot
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Tariff Turmoil: Last week, President Trump unexpectedly paused reciprocal tariffs for 90 days and hinted at exemptions on auto-related duties. However, he maintained a 145% tariff on select Chinese imports and warned of upcoming levies on semiconductors and pharmaceuticals—stoking further uncertainty.
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China’s Retaliation: In response, China hiked tariffs on US goods to 125%, escalating concerns over a full-blown trade war that could dampen global growth. This geopolitical tension continues to boost demand for gold.
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Investor Sentiment Wanes: Trump’s inconsistent tariff strategy has shaken investor confidence in US economic policy. At the same time, expectations for a 100 basis point rate cut by the Fed in 2025 have driven the USD sharply lower.
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China’s Growth Surprises: China’s economy grew 5.4% in Q1 year-over-year, surpassing forecasts. Retail Sales, Industrial Production, and Fixed Asset Investment also outperformed, though optimism was overshadowed by trade war concerns.
With markets on edge, gold appears set to extend its rally. All eyes are now on Powell’s speech and further trade-related headlines, which are likely to steer the next move in the XAU/USD pair.
Australian Dollar Holds Steady as US Dollar Softens Ahead of Retail Sales Data
The Australian Dollar (AUD) continued its upward momentum for the sixth straight session on Wednesday, with the AUD/USD pair remaining resilient following the release of Australia’s Westpac Leading Index. The index, which forecasts economic growth over the next three to nine months, showed a slower pace—easing to 0.6% in March from 0.9% in February.
Supporting the Aussie further, China’s economic data came in stronger than expected. The country’s GDP expanded by 5.4% year-on-year in Q1 2025, matching Q4 2024’s pace and exceeding the 5.1% consensus forecast. On a quarterly basis, GDP rose 1.2%, slightly below the projected 1.4%, but still reflecting steady momentum.
China’s Retail Sales jumped 5.9% year-over-year in March—well above the expected 4.2% and February’s 4%—while Industrial Production surged by 7.7%, beating both the 5.6% forecast and February’s 5.9% figure.
The Aussie also found support from improved global risk sentiment after U.S. President Donald Trump announced exemptions on certain key tech products from new proposed tariffs. These exemptions include smartphones, semiconductors, computers, solar panels, and flat-panel displays—many of which are produced in China, Australia’s top trading partner and a major destination for its exports.
On the domestic front, Australia’s 10-year government bond yield edged down to 4.33% after the Reserve Bank of Australia (RBA) released minutes from its March 31–April 1 policy meeting. The minutes revealed that trimmed mean inflation had fallen below 3% in Q1, while consumer demand showed signs of recovery.
Although the RBA acknowledged the May meeting as a possible opportunity to reassess monetary policy, no definitive stance was taken. Markets are currently pricing in a 25-basis point rate cut in May and anticipating around 120 basis points of easing over the next 12 months.
Attention now turns to Thursday’s employment data, which could offer critical insight into labor market conditions and influence the RBA’s upcoming decisions.