The release of the purchasing managers’ index (PMI) for services and manufacturing from Europe added to the market volatility in trading on Thursday (May 22, 2025). The mixed PMI readings helped the US dollar regain strength against the euro and the British pound.
Previously, the US dollar was under pressure after Moody’s downgraded the US credit rating last Friday. This sentiment is expected to continue impacting market movements in tonight’s trading session. Additionally, several economic data points from the US are anticipated to influence the market direction.
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Here’s the latest data from Trading Central:
- US unemployment claims (May 17) at 19:30 WIB; forecast 231K vs previous 229K
- US manufacturing PMI (May) at 20:45 WIB; forecast 50.3 vs previous 50.2
- US services PMI (May) at 20:45; forecast 51 vs previous 50.8
- Existing home sales in the US (month-on-month/April); forecast 0.7% vs previous -5.9%.
GOLD
The strengthening US dollar led to profit taking in Gold (XAUUSD), which fell to $3,304.21 per troy ounce.
Gold had been climbing steadily since the start of the week, including a peak this morning at $3,345 per troy ounce. The economic data from the United States released tonight could be a significant mover for Gold. Overall, as previously noted, US economic data is expected to improve.
There is potential for continued profit taking in Gold if tonight’s US economic data is better than the forecast.
OIL
Oil prices (CLS10) dropped in early European session trading, reaching a daily low of $60.36 per barrel. Compared to Wednesday’s trading close, Oil fell by $0.96.
Oil has faced pressure since Wednesday after the EIA reported a 1.4 million barrel increase in US stockpiles for the week ending May 16. This increase contradicted the forecast of a 1.9 million barrel decrease noted in Trading Central.
The negative sentiment from the rising stock levels is likely to continue affecting Oil’s movement in tonight’s trading.
EURUSD
EURUSD reversed to 1.12911 at the start of the European trading session after previously reaching 1.13448. The currency pair fell following Germany’s report of a May manufacturing PMI at 48.8, which was below the forecast of 49.1 and the previous month’s 48.4.
Meanwhile, the services PMI reported at 47.2 was also lower than the forecast of 49.9 and the April figure of 49. The deepening decline in PMI below 50 (the dividing line between expansion and contraction) suggests that the German economy may experience contraction again in Q2 2025 following a 0.2% growth quarter on quarter (QoQ) in Q1 2025. This provides negative sentiment for EURUSD.
The downward pressure on EURUSD could increase if US data is released better than the forecast.
GBPUSD
Similar to EURUSD, this currency pair reversed down to 1.33915 at the beginning of the European trading session, although the PMI data from the UK was not too negative.
The manufacturing PMI for May was reported at 45.1, lower than the forecast in Trading Central of 46 and the previous 45.4. On the other hand, the services PMI grew to 50.2, surpassing the forecast of 49.3 and the April figure of 49.
The release of this mixed data led to profit taking action, causing GBPUSD to decline despite its position still being near the highest level since February 2022. Profit taking may continue in tonight’s trading if US economic data outperforms the forecast.
USDJPY
USDJPY trimmed its losses after previously dropping to 142.801 at the start of the European trading session. Before today, USDJPY had decreased in 6 out of the last 7 trading days, totaling a loss of 4,798 points (479.8 pips).
Such a decline prompted some traders to close their sell positions to realize profits. This action may carry on in tonight’s trading if the US data is better than the forecast.
Nasdaq
The Nasdaq index rebounded at the start of the European trading session after plummeting in Wednesday’s trading. By this afternoon, Nasdaq rose by 80 index points to 21,225.
Concerns over the significant US debt and potential fiscal deficits, following President Trump’s plans to cut taxes, triggered profit taking in Nasdaq on Wednesday. However, the tax cut plans are not expected to occur soon, allowing Nasdaq to rebound.
In tonight’s trading, Nasdaq may gain further positive sentiment if US economic data exceeds the forecast.
