As the year comes to a close, financial markets are experiencing notable calm, with no significant economic data releases on the horizon. The US Dollar Index is holding steady around the 108.00 mark, achieving three consecutive months of positive performance. Meanwhile, US futures trading has seen a slight decline, reflecting the downturn experienced on Wall Street, as market activity is expected to normalize post-New Year celebrations.
GOLD
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Gold prices have shown resilience during the European trading session, currently valued at $2,617, buoyed by a slight retreat of the US Dollar due to profit-taking after maintaining levels above 108. The precious metal continues to attract investors as a safe haven, especially amidst the ongoing Russia-Ukraine conflict and sustained tensions in the Middle East.
However, the upswing in gold prices appears limited as market expectations point towards a slower reduction in interest rates by the Federal Reserve in 2025.
OIL
Oil price movements remain highly volatile, even with thin trading volumes due to the holiday season. Prices climbed during the European trading session to $71.72, supported by promising manufacturing data from China that bolsters the demand outlook for oil.
Tonight, oil price volatility is expected to rise further, fueled by positive news from China and a reported drop in US crude oil inventories, estimated to have decreased by about 3 million barrels last week.
EURUSD
The EURUSD pair has managed to recover from selling pressure during the European session, rising to 1.0424 as the US Dollar weakened due to falling US Treasury yields. On Monday, the yields for 2-year and 10-year Treasuries were recorded at 4.24% and 4.53%, respectively.
Despite this recovery, the Euro faces challenges in gaining strength, as the European Central Bank (ECB) has indicated that interest rate policies are likely to remain accommodative in the coming year.
GBPUSD
In contrast to the EURUSD, the GBPUSD currency pair has experienced a downturn during the European trading session. This decline is largely attributed to internal uncertainties within the Bank of England (BoE), where policymakers are increasingly divided on the necessity of cutting interest rates to combat economic slowdowns.
Tonight, GBPUSD may continue to face weakness amid low trading volumes as the year draws to a close.
USDJPY
The USDJPY pair has bounced back from its daily lows, climbing to the opening level of 15.898 after establishing a new daily low at 156.020. However, the upward movement of USDJPY appears to be limited due to expectations that the Bank of Japan (BoJ) will raise interest rates in January.
NASDAQ
The Nasdaq has recovered in the European trading session following a sharp decline in Wall Street driven by year-end profit-taking. The volatility of Nasdaq’s movements is likely to persist during tonight’s US session, as major stocks within the technology sector continue to exhibit weakness.
