Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone
March 07, 2025 –
“The U.S. dollar remains under pressure, marking its fourth consecutive session of losses, reaching its lowest level since last November. The DXY index fell 0.2%, showing that not even positive labor data provided significant relief to the U.S. currency.
The recent drop in U.S. initial jobless claims, which fell by 21,000 to 221,000 claims in the last week of February, positively surprised the market. However, this news failed to stop the dollar’s decline, highlighting that market concerns run deeper, mainly focusing on the economic and trade outlook.
A key factor in this negative scenario has been the record trade deficit reported in January, which reached $131.4 billion, far exceeding previous estimates and reflecting a 10% increase in imports due to expectations of new tariffs. This figure clearly reflects the uncertainty surrounding the U.S. economy and the potential impact of tariff policies on economic growth.Additionally, widening trade gaps with key partners such as China, the European Union, and Canada underscore the structural vulnerability of U.S. foreign trade. The deficit with China, for instance, reached $29.7 billion, significantly widening the gap from the previous month.
Looking ahead, the outlook is not encouraging. Although the temporary postponement of tariffs on automobiles from Mexico and Canada temporarily eases market anxiety, it does not provide a definitive solution to the structural issues in U.S. trade and international relations.Finally, the February Non-Farm Payrolls report will be crucial. A weaker-than-expected figure could further intensify bearish pressure on the dollar, reinforcing themes of monetary and trade uncertainty for the U.S. economy.”
Analysis by Quasar Elizundia, Expert Research Strategist – Pepperstone