April 17 FX Signals: Can an ECB Hawkish Cut Crash DAX and Boost the Euro?
Today the ECB is expected to cut rates by 25 bps, with Dax at risk of a major decline while the Euro could benefit from a hawkish statement.
Skerdian Meta•Thursday, April 17, 2025•4 min read
Quick overview
The ECB is expected to cut rates by 25 basis points, which may lead to a decline in the Dax and a potential rise in the Euro if a hawkish statement is issued.
U.S. retail sales increased by 1.4%, but the dollar weakened, with the USD/JPY pair hitting its lowest point since September 2024.
Gold prices surged to a record high of $3,357 per ounce, driven by trade tensions and a falling U.S. dollar, marking the largest three-day rally in the precious metals market.
Bitcoin experienced volatility, dropping below $75,000 before rebounding above $80,000, while Ripple (XRP) showed resilience, maintaining support around key levels.
Today the ECB is expected to cut rates by 25 bps, with Dax at risk of a major decline while the Euro could benefit from a hawkish statement.
Will this be a dovish or hawkish rate cut by the ECB?
U.S. retail sales posted a solid gain of 1.4% yesterday, while business inventories ticked up by 0.2%, reflecting strong consumer demand against moderately rising stockpiles. The U.S. dollar, however, weakened throughout the day, extending its recent slide. The USD/JPY pair dropped to its lowest point since September 2024 before stabilizing near the 141.60 level, marking a key technical support zone.
In Canada, the Bank of Canada opted to keep interest rates steady during its policy meeting, despite the burden of elevated mortgage rates over recent years due to persistently high interest rates. Meanwhile, U.S. Federal Reserve Chair Jerome Powell spoke at the Economic Club of Chicago, stating that the Fed remains in a favorable position to wait for further economic clarity before making any policy adjustments. He acknowledged signs of deceleration in Q1 economic growth but emphasized the resilience of the broader economy despite rising uncertainties and downside risks.
Inflation continues to hover slightly above the Fed’s 2% goal, with personal consumption expenditures (PCE) expected to have climbed 2.3% over the past 12 months. This continued inflationary pressure, albeit lower than peak levels, has kept the dollar on the back foot.
Powell’s remarks failed to buoy U.S. equities, which were already struggling following Nvidia’s announcement of a $5.5 billion charge related to new U.S. export rules. These restrictions now require licensing for the export of Nvidia’s H20 AI chips to China, following Senator Elizabeth Warren’s warning about China’s development of cutting-edge weaponry. The clampdown also affected AMD and Intel, pushing tech shares lower by 5% to 10% across the board. U.S. Treasury yields dropped for a third straight session as investors sought safer assets.
Commodities, meanwhile, saw sharp moves. Crude oil advanced by $1.50, or 2.5%, to settle at $63 per barrel, while gold prices soared by $113, or 3.5%, to reach $3,342.48—marking the biggest single-day surge in nearly a decade.
Today’s Market Outlook: ECB Set to Cut Rates as Inflation Eases
All eyes are on the European Central Bank today, which is widely anticipated to lower its benchmark interest rate by 25 basis points to 2.25%. The ECB has recently adopted a slightly more cautious tone as Germany and the broader eurozone show signs of recovery. Nevertheless, fresh uncertainties surrounding global tariffs are expected to put additional strain on policymakers in the short term.
Eurozone inflation metrics, particularly core and services inflation, have been improving, supporting the case for further easing. Market analysts predict additional 25 basis point cuts in both June and September, which would reduce the deposit rate to 1.75% by year-end. However, if Lagarde disappoints expectations and sounds hawkish, we might see a surge in the Euro, while the Dax would tumble lower, and vice versa in case of a dovish cut.
Last week markets were crazy, with Gold surging $250 in the last three days, EUR/USD surging 5 cents while stock markets opening lower then reversing higher. The moves were massive and volatility immense, so we opened 40 trading signals in total, closing the week with 25 winning signals and 15 losing ones.
Gold Reaches Another Record High Close to $3,200
Gold has made a stunning comeback since rebounding off its 50-week simple moving average in early April. Over the past three trading sessions, gold prices have climbed $260—marking the most significant three-day rally in the precious metals space on record.
Trade tensions between the U.S. and China fueled a renewed appetite for safe-haven assets. The dramatic fall in the U.S. dollar further boosted gold, helping it hit new all-time highs. On Wednesday, gold surged past its previous peak to close at $3,357 per ounce, drawing heavy speculative interest and putting the metal firmly back at the center of the global market conversation.
XAU/USD – Daily Chart
USD/CAD Returns Down to the 200 SMA after the BOC Held Rates Unchanged
In currency markets, the USD/CAD pair rebounded strongly following a dip earlier in the week. After weaker Canadian CPI inflation data was released, the pair spiked by around 130 pips, pushing it back above the 1.3950 level. The U.S. dollar had gained ground, reversing recent losses. Earlier this year, the USD/CAD pair had surged to its highest level in over 25 years—1.4792 in February—after President Donald Trump imposed a 25% tariff on Canadian and Mexican imports. However, adjustments in trade policy and continued negotiations brought the exchange rate below 1.40 before this latest rebound.
USD/CAD – Weekly Chart
Cryptocurrency Update
MAs Keep Pushing BTC Highs Lower
Cryptocurrencies mirrored the intense price swings seen in traditional assets. Bitcoin, which had rallied by $5,000 the previous week amid dovish signals from the Federal Reserve, dropped sharply below its 200-day moving average and fell under the $75,000 mark. However, sentiment quickly turned after former President Trump made remarks that rekindled risk appetite, prompting Bitcoin to surge back above $80,000 with an $8,000 gain. The 50-day moving average also acted as a magnet for buyers, reinforcing the bullish momentum.
BTC/USD – Daily chart
Ripple XRP Finds Resistance at the 50 Daily SMA
Ripple (XRP), in particular, stood out for its relative strength during this period. Even as the broader crypto space faltered, XRP found consistent support around key psychological and technical levels—$2.20, $2.00, and $1.80—anchored by its 200-day moving average. These levels attracted strong buying interest, highlighting the token’s solid demand base despite market volatility.
As global markets staged one of their most robust rallies in recent months by midweek, digital assets joined the upswing. Ripple led the charge, reclaiming the $2 threshold and helping to restore investor confidence as the market prepared for its next phase of consolidation.
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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