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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Foreign Exchange]: Trump sends a major signal to tariffs! OPEC+ may consider continuing to accelerate production increase in June." Hope it will be helpful to you! The original content is as follows:
The US dollar index soared Wednesday, with the U.S. government sending signals that it could ease trade tensions, coupled with the threat of U.S. President Trump abandoning the replacement of Federal Reserve Chairman Powell, which has strengthened the dollar against major currencies.
The dollar's safe-haven status has been questioned due to Trump's trade policy and its potential impact on the U.S. economy, hovering around three-year lows in recent weeks. But as tensions seem to ease, investors quickly returned to the dollar.
Trump set a 10% basic import tax on dozens of countries at the beginning of this month, and even imposed higher tariffs on some countries, but immediately announced a 90-day suspension for negotiations.
The market is also worried about whether the Fed's independence is threatened this week, with Trump constantly criticizing Chairman Powell for not cutting interest rates since taking office.
Trump's remarks on Tuesday night local time seemed to soften, and he told reporters: "I have no intention of firing him. But I hope he can be more active in cutting interest rates."
MUFG senior currency analyst Lee Hardman pointed out that Trump's "clear denial" is an encouraging signal for the market.
The Wall Street Journal quoted people familiar with the matter as saying that US Treasury Secretary Becent and aihuaforex.commerce Secretary Lutnik expressed concerns, U.S. President Trump gave up on the idea of firing Federal Reserve Chairman Powell.
The report quoted people familiar with the matter as saying that Becent and Lutnik warned Trump that the firing of Powell could trigger far-reaching market turmoil and lead to aihuaforex.complex legal disputes.
The report quoted a person familiar with the matter as saying that Lutnik also told Trump that even if Powell was fired, it might not cause a tangible change in interest rates,For other members of the Fed's Council, the attitude towards monetary policy may be similar to that of Powell.
Asian Market
Japan's initial PMI data in April showed that the private sector resumed growth, with the aihuaforex.comprehensive PMI rising from 48.9 to 51.1. The recovery was driven mainly by a rebound in the service industry, with service activity rising from 50.0 to 52.2. Meanwhile, manufacturing is still in a contraction state, but the decline slowed slightly, with the Purchasing Managers Index rising slightly from 48.4 to 48.5.
According to S&PGlobal's AnnabelFiddes, the differentiation between industries reflects a sluggish factory output and a stronger demand for services.
A closer look at new business trends and found further differences between the two. New orders have seen their biggest drop in more than a year due to lower foreign demand and ongoing concerns over tariffs and customer spending, the manufacturer reported. By contrast, new job growth for service providers is the strongest since January.
Nevertheless, inflationary pressures were strong across the board, and input costs rose at the fastest pace in two years, prompting the aihuaforex.company to pass on these costs to customers by raising sales prices.
In the early stages of the COVID-19 crisis, overall optimism about output next year has dropped to its lowest level since August 2020.
European market
The UK private sector shranked sharply in April, with the initial value of the aihuaforex.comprehensive purchasing managers index falling from 51.5 to 48.2, the lowest level in 29 months. The manufacturing Purchasing Managers Index fell from 45.3 to 44.0, a 20-month low. The service industry purchasing managers index fell from 52.5 to 48.9, the lowest level in 27 months.
The recession marks the biggest drop in output in nearly two and a half years, and now data suggests quarterly GDP may drop -0.3%.
In addition, business confidence has dropped to its lowest level since the end of 2021, even below the low after the Brexit referendum. The decline in exports related to weak global demand and escalating trade tensions has exacerbated domestic burdens. Rising employee costs—partially due to changes in national insurance and minimum wage rules—further squeeze profit margins.
The sharp contraction and market sentiment collapse have brought "red flags" to policy makers and could prompt the Bank of England to cut interest rates at its upcoming May meeting.
The eurozone economy showed signs of stagnation in April, with its aihuaforex.comprehensive purchasing managers index falling from 50.9 in March to 50.1, a four-month low. The decline was mainly due to the downturn in the service industry, which contracted for the first time in five months, with the Purchasing Managers Index falling from 51.0 to 49.7. By contrast, the manufacturing industry showed unexpected resilience, with the Purchasing Managers Index rising slightly from 48.6 to 48.7, reaching a 27-month high.
Cyrus dela Rubia, chief economist at Hamburg aihuaforex.commercial Bank, pointed out that manufacturers appear to be "not too worried" about the widespread tariffs imposed by the United States recently, including a general tariff of 10% and a 25% auto tariff.
He noted that part of the reason was that concerns about the U.S. recession drove down energy prices and planned increase in defense spending, which are factors that underpin manufacturing. However, the decline in service industry activity has dragged down overall output, pushing the eurozone economy into what delaRubia calls a "stagnant area."
The ECB may find some aihuaforex.comfort in the latest inflation signals. Although the investment costs of the service industry remain high, the pace of rising selling prices has slowed down. In the aihuaforex.commodity sector, input prices fell, breaking the trend of rising costs for four consecutive months, while output prices only rose slightly.
At the national level, Germany and France both reflect trends in the region, with manufacturing output increasing, but service activity declining.
U.S. market
The U.S. economy showed signs of a significant slowdown in April, with the initial value of the S&P Global aihuaforex.comprehensive Purchasing Managers Index falling from https://aihuaforex.com53.5, the lowest level in 16 months. While manufacturing activity rose slightly from 50.2 to 50.7, the service industry lost significant momentum, falling from 54.4 to 51.4.
According to S&PGlobal's Chris Williamson, early data showed that "the growth of business activity slowed significantly" at the beginning of the second quarter, with output growth at the lowest level since December 2023. This means that the annualized GDP growth rate is only about 1.0%.
At the same time, inflationary pressure is reappearing. The aihuaforex.company reported that input costs rose sharply, driven by tariff-related price increases and ongoing wage pressures.
The price increase in manufacturing has reached its fastest pace in nearly two and a half years. Service aihuaforex.companies have also increased sales prices at the highest rate in more than a year.
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