In February 2025, the United States Consumer Price Index excluding food and energy recorded an annual rate of 3.1%, slightly below the anticipated 3.2%. This lower-than-expected inflation data has influenced market dynamics.
Gold prices have shown a recovery, nearing $2,940 per troy ounce, due to a lack of clear direction from the US Dollar and concerns over tariffs. Meanwhile, the GBP/USD pair is aiming for the 1.3000 mark amid a positive atmosphere in risk assets and fluctuating US Dollar values.
Cryptocurrency Market Declines
Bitcoin, XRP, and Solana experienced declines as the US stock market fell, reflecting a broader risk-off mood in the cryptocurrency sector.
Put simply, inflation in the United States rose by 3.1% over the past year when excluding food and energy. Markets had been preparing for a slightly higher figure of 3.2%, but with the actual number coming in lower, assets reacted accordingly.
Gold has moved back up towards $2,940 per troy ounce. This rally appears linked to uncertainty around the US Dollar and discussions about potential tariffs, which have left investors hesitant. When traders are unsure of the next moves in currency markets, they often turn to gold as a safer option.
In the currency market, sterling has edged higher against the US Dollar and is moving towards 1.3000. A more upbeat mood in broader markets has likely assisted this momentum, alongside shifting conditions in the Dollar. If this combination holds, we could see further movement towards this level.
Key Market Factors Ahead
On the other hand, Bitcoin, XRP, and Solana have all taken a hit. This comes as US stock markets suffered declines, leading to a wider retreat in risk assets. Cryptocurrency markets still tend to follow equities during periods of uncertainty, and today has been no different.
What traders must watch in the next few weeks is how inflation expectations shift and whether central banks acknowledge this latest data as a reason to adjust their plans. If positions are heavily built on a particular economic assumption, any adjustments or surprises could move markets sharply.
