US President Donald Trump has once again sparked significant volatility in the markets during trading on Thursday night, continuing into Friday morning (January 25, 2025). Market volatility surged after President Trump indicated he would pressure the Federal Reserve to promptly lower interest rates.
This sentiment is expected to continue impacting market movements during the European trading session today, in addition to several economic indicators from Germany and the UK. The following are data points from Trading Central:
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- German manufacturing PMI at 15:30 WIB; forecast 42.3 vs previous 42.5
- German services PMI at 15:30 WIB; forecast 51 vs previous 51.2
- UK manufacturing PMI at 16:30 WIB; forecast 47.2 vs previous 47
- UK services PMI at 16:30 WIB; forecast 51 vs previous 51.1
GOLD
The price of Gold (XAUUSD) surged by $23 or 230 pips to $2,777.25 per troy ounce, reaching its highest point since October 31, when this precious metal recorded an all-time high of $2,790 per troy ounce. Thus, Gold is now merely 130 pips away from setting a new all-time high.
Trump’s push for the Federal Reserve to lower interest rates has created a positive sentiment for Gold. Additionally, Trump has once again brought up trade relations with the European Union, potentially indicating a likelihood of increasing import tariffs. This sentiment will influence Gold’s performance during the European trading session.
OIL
Oil prices (CLS10) have dropped for six consecutive days, closing Thursday’s trading at $74.25 per barrel. Over this six-day period, Oil prices plummeted by $6.23.
Trump’s plans to increase Oil production in the United States continue to exert pressure. Moreover, the possibility of an end to the Russia-Ukraine conflict under the Trump administration could lead to a flood of Russian Oil supplies back into the market, adding further negative sentiment to Oil.
EURUSD
The EURUSD pair rose by 388 points (38.8 pips) to 1.04539 this morning, nearing its highest level in the past month. Trump’s insistence on the Federal Reserve to lower interest rates has allowed EURUSD to rally.
However, if the German manufacturing and services PMI data is released lower than expected, EURUSD could face negative sentiment. Additionally, the European Central Bank (ECB) is predicted to lower interest rates next week.
GBPUSD
Similar to EURUSD, this currency pair surged by 523 points (52.3 pips) to 1.24037 in morning trading. Various statements from Trump have also contributed to the rise of GBPUSD.
During the European session, the release of the UK manufacturing and services PMI data may serve as a driver for GBPUSD. Data published lower than the forecast could lead to negative sentiment for GBPUSD.
USDJPY
USDJPY has fallen to 155.002 this afternoon, dropping more than 1,000 points (100 pips) compared to Thursday’s closing. Besides the pressure on the US dollar due to Trump’s actions, the Bank of Japan (BoJ) raising interest rates to 0.5% from a previous 0.25% has also contributed to the downward pressure on USDJPY.
This sentiment is expected to continue influencing USDJPY’s movements throughout today’s trading.
Nasdaq
The Nasdaq has recorded four consecutive days of gains during Thursday’s trading, approaching the all-time high of 22,151 reached on December 16. This increase follows Trump’s announcement that he will push the Federal Reserve to immediately lower interest rates, which will continue to influence Nasdaq’s performance during the European session.
