In January, Mexico’s trade balance deviated from expectations, recording a deficit of $4.558 billion, compared to the anticipated deficit of $3.8 billion.

The US Dollar has surged, impacting currency pairs such as EUR/USD and GBP/USD, which fell to weekly lows around 1.0420 and 1.2630, respectively. Additionally, gold prices declined, nearing two-week lows of $2,880 per ounce.

Bitcoin experienced a slight recovery, trading at approximately $86,000 after a significant drop earlier in the week. February inflation is expected to drop in France but shows differing trends across the Eurozone, with service prices continuing to rise.

Mexico’s trade deficit has widened more than expected, reaching $4.558 billion instead of the forecasted $3.8 billion. This suggests that imports are outpacing exports at a faster rate than analysts had projected. For those of us closely watching currency markets, this data hints at underlying shifts in demand and trade flows that could influence exchange rates in the short term.

Meanwhile, the US Dollar has gained strength, pulling major currency pairs lower. The EUR/USD and GBP/USD dropped to 1.0420 and 1.2630, marking their weakest points this week. When the dollar rises this sharply, it usually reflects either tightening financial conditions or a flight to safety. Traders in derivatives markets may need to adjust risk exposures, particularly those holding long euro or sterling positions.

Commodities have not been spared, with gold edging lower, approaching $2,880 per ounce. A rising dollar tends to put pressure on commodities, making them more expensive for holders of other currencies. This decline could also indicate reduced safe-haven demand, possibly driven by shifts in inflation expectations or changing views on interest rate policies.

Bitcoin, after tumbling earlier in the week, has managed to claw its way back to around $86,000. The recovery suggests that buyers are stepping in, though whether this represents a lasting shift or just a temporary bounce remains to be seen. Given how volatile digital assets have been, it wouldn’t be surprising if price swings remain pronounced.

The inflation outlook in Europe remains mixed. February data from France is expected to show a decline, while the wider Eurozone presents a different picture, with service prices continuing to increase. Stubborn inflation in services often means that core inflation remains elevated, which central banks watch closely when considering policy moves. Markets tied to interest rates and currency pairs involving the euro will likely be sensitive to any updates on this.