A series of economic data from the United States released this week fell short of expectations, reviving hopes that the Federal Reserve might cut interest rates twice this year. This sentiment has influenced market movements at the beginning of the European trading session on Friday (January 17, 2024).
The economic data from the US released tonight has the potential to trigger more significant movements. Here are the details from Trading Central:
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- Building Permits (month-on-month/Dec) at 20:30 WIB: forecast -0.9% vs previous 5.2%
- Housing Starts (month-on-month/Dec) at 20:30 WIB: forecast 2% vs previous -1.8%
- Industrial Production (month-on-month/Dec) at 21:15 WIB: forecast 0.1% vs previous -0.1%
GOLD
The price of Gold (XAUUSD) declined at the start of the European trading session, hitting a daily low of $2,705.75 per troy ounce. Compared to Thursday’s close, Gold dropped by $8.36 or 83.6 pips.
This profit-taking action has caused Gold to retreat after gaining for three consecutive days with a total increase of over $51, reaching a one-month high. If the economic data from the US released tonight falls below expectations, Gold could see positive sentiment again.
OIL
Oil prices (CLS10) cut gains early in the European session after previously rising to $79.41 per barrel. The sentiment around oil remains positive following sanctions imposed by the United States on the Russian crude oil industry and reductions in stocks in the US.
This sentiment is expected to continue influencing oil movements in tonight’s trading.
EURUSD
The EURUSD moved within the range of 1.02775 – 1.03095 at the start of the European trading session. Given that the EURUSD is still close to its lowest level since November 2022, and with a series of US economic data released below expectations, there is a significant chance of a rebound today.
This is especially true if tonight’s US economic data is again released below the forecast.
GBPUSD
The GBPUSD plummeted early in the European session, reaching a daily low of 1.21602. Compared to Thursday’s close, GBPUSD fell by 753 points (75.3 pips).
The drop in GBPUSD followed data indicating a monthly decline in UK retail sales. This pair had already faced pressure after Bank of England member Alan Taylor suggested that interest rates should be cut five to six times this year to avert a deeper economic downturn.
This sentiment is expected to continue affecting the GBPUSD movements in tonight’s trading.
USDJPY
The USDJPY rose at the start of the European trading session, reaching a daily high of 155.846. This currency pair has seen gains after a decline of more than 260 pips over the last two days.
The rise appears to be driven by technical factors and there is potential for USDJPY to receive positive sentiment in tonight’s trading if US economic data is released below expectations.
Nasdaq
The Nasdaq rose at the beginning of the European session, hitting a daily high of 21,350. The Nasdaq is experiencing high volatility, as market participants are not only reacting to economic data but are also awaiting the first steps that Donald Trump will take after being inaugurated as the 47th President of the United States next Monday.
However, if tonight’s US economic data is released below forecasts, the Nasdaq could garner positive sentiment.
