UK manufacturing production in February showed a year-on-year change of 0.3%, surpassing forecasts of -2.4%. This reflects a positive outcome amidst broader economic uncertainties.
Gold reached a record high exceeding $3,220 due to increased tariffs on US goods by China. This has driven safe-haven investments in precious metals.
Currency Movements
The EUR/USD pair rose to a multi-year peak of over 1.1400, attributed to weakness in the US Dollar. The GBP/USD advanced near 1.3100, influenced by concerns regarding the escalating China-US trade conflict.
In cryptocurrency, Bitcoin and Ethereum indicated some weakness, trading around $80,000 and $1,500 respectively, while Ripple stabilised after finding support.
The uptick in UK manufacturing production, coming in at 0.3% year-on-year for February against expectations of a sharp decline, points towards certain resilience in output despite continued headwinds. This unexpected strength suggests that the contractionary pressures from external markets and domestic demand shortfalls may not be as entrenched as previously assumed. While we shouldn’t interpret this as a broad-based turnaround, it does warrant a measured positioning towards UK macro data in the short term.
Gold’s decisive push above $3,220 has been anything but subtle, underlining ongoing appetite for assets perceived as defensive. The tariff levies from China against US goods appear to have triggered a renewed bid in metals, a move that is typically observed when geopolitical tensions jar market confidence. We have seen demand spike in line with these developments, and that momentum has further dimmed appetite for risk assets in many parts of the market.
Volatility and Market Strategies
With the EUR/USD moving beyond 1.1400, marking its highest level in years, the selloff in the US Dollar is now firmly translating into dollar-sensitive pairs. The drivers behind this weakness are not isolated; rather, they reflect a constellation of policy expectation shifts, doubts over the pace of US growth, and changing trade assumptions. Sterling’s climb offered by the GBP/USD pair, circling the 1.3100 line, mirrors a similar dynamic. Though in this case, the fuel is drawn less from domestic speculation and more from external trade-related tension.
If we shift our gaze to digital assets, both Bitcoin and Ethereum have faltered. Bitcoin nearing the $80,000 mark might read as impressive at first glance, but current price action lacks the conviction seen in earlier rallies. The subdued tone in Ethereum, holding around $1,500, only cements this view. This kind of response from cryptos, particularly their muted engagement in recent sessions, may reflect caution caused by rising treasury yields or simply lack of directional drivers. Ripple, interestingly, appears to have arrested its descent, firming up near previously contested price regions. This might suggest it’s attempting a local base—yet it’s too early to frame it as a trend reversal.
From our vantage point, the tactical approach needs to weigh bond volatility against asset-class rotations that stem from trade disputes and monetary shifts. Economic surprise indices, especially from Europe and the UK, could start gaining traction in forward-looking models if this resilience sustains. Positions based on dollar softness should consider the limits of that trade—particularly if upcoming data from the US disrupts current inflation expectations. For now, the moves across multiple asset classes are providing reliable markers of sentiment: broad-based caution layered with pockets of recalibration.
Pricing in volatility seems more appropriate than anchoring on central policy paths alone, which have lately lacked clarity. Where safe havens gain and growth-sensitive assets stall, there’s often room to build exposure in range-bound strategies or near-term volatility setups. Most importantly, keeping an eye on correlation breakdowns—as we’ve seen between crypto and treasury markets, or metals and equities—may present an edge in the days ahead. Let’s remain adaptive.
