ForexLive European FX news wrap: Dollar steady, gold holds firmer amid risk averse mood

Headlines:

• Markets increase bets on ECB rate cuts following the softer inflation figures
• What is the distribution of forecasts for the US PCE?
• ECB's de Guindos: Caution is even more important during times of uncertainty
• France March preliminary CPI +0.8% vs +0.9% y/y expected
• Spain March preliminary CPI +2.3% vs +2.4% y/y expected
• Germany April GfK consumer sentiment -24.5 vs -22.7 expected
• Germany March unemployment change 26k vs 10k expected
• Eurozone March final consumer confidence -14.5 vs -14.5 prelim
• UK February retail sales +1.0% vs -0.4% m/m expected
• Japan PM Ishiba says counter-tariffs are not the most effective now
• China president Xi: US-China relations should stay stable, healthy
• Heads up: The clocks will go forward in Europe this weekend
• ICYMI: Bank models predict dollar demand for this month-end, quarter-end

Markets:

• JPY leads, NZD lags on the day
• European equities lower; S&P 500 futures down 0.2%
• US 10-year yields down 3.9 bps to 4.330%
• Gold up 0.7% to $3,077.53
• WTI crude flat at $69.91
• Bitcoin down 2.6% to $85,020

It was a slower session as broader markets continue to adopt a more cautious tone, with Trump tariffs next week casting a shadow over proceedings.

Risk sentiment remains on the defensive, with European indices keeping lower while US futures are also a little more subdued.

The overall mood is helping to keep the dollar in a steadier spot at the balance, with EUR/USD down 0.3% to 1.0770 levels. The pair is also caught in between large option expiries on the day and softer French and Spanish inflation numbers are also pinning the pair down. On the latter, traders are now pricing in ~90% odds of a rate cut by the ECB in April - up from ~80% before that.

Meanwhile, GBP/USD is down 0.1% to 1.2930 despite a beat on UK retail sales data while USD/CAD is seen up 0.1% to 1.4320 on the day. The antipodes are the laggards, with AUD/USD down 0.2% to 0.6290 levels and NZD/USD down 0.4% to 0.5715 with month-end flows also a consideration perhaps.

USD/JPY is also lower on the day, down 0.2% to 150.78 with lower Treasury yields amid the more risk averse mood in markets.

Besides that, gold continues to shine brightly as the precious metal pushed to a fresh record high of $3,086 before keeping just under that - up 0.7% on the day to $3,077 currently.