The potential for a trade agreement between the United States (U.S.) and the European Union (EU) is driving significant movements in the financial markets.
U.S. President Joe Biden announced that a trade deal with several key trading partners, including Europe, is imminent. This statement followed the recent conclusion of a trade agreement with Japan.
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EU diplomats, as reported by Financial Times, indicated that countries in the European continent will agree to a trade deal with an import tariff of 15%. This arrangement is similar to the one established between the United States and Japan.
This sentiment is expected to continue influencing market movements during the European trading session on Thursday (July 24, 2025), in addition to the release of various economic data. Here are some key data points from Trading Central:
- German consumer confidence index (August) at 13:00 WIB; forecast -20 vs previous -20.3
- Flash manufacturing PMI for Germany (July) at 14:30 WIB; forecast 49.5 vs previous 49
- Flash services PMI for Germany (July) at 14:30 WIB; forecast 50.5 vs previous 49.7
- Flash manufacturing PMI for the Eurozone (July) at 15:00 WIB; forecast 49.9 vs previous 49.5
- Flash services PMI for the Eurozone (July) at 15:00 WIB; forecast 50.8 vs previous 50.5
- Flash manufacturing PMI for the UK (July) at 14:30 WIB; forecast 48.5 vs previous 47.7
- Flash services PMI for the UK (July) at 14:30 WIB; forecast 52.9 vs previous 52.8
GOLD
The price of Gold (XAUUSD) plummeted by over $44 or 440 pips to $3,386.85 per troy ounce during Wednesday’s trading. The potential trade agreement between the U.S. and EU diminishes Gold’s appeal as a safe haven asset.
Investors are now returning to riskier assets that offer higher returns, leading to downward pressure on Gold prices. This sentiment is likely to impact market movements throughout the European trading session.
OIL
Oil prices (CLS10) rebounded from earlier losses and closed Wednesday’s session flat at $65.42 per barrel.
Strengthening signals of a U.S.-EU trade agreement have provided a positive sentiment for Oil. The agreement could prevent a slowdown in the global economy, suggesting continued strong demand for Oil.
This sentiment is expected to influence Oil movements during the European trading session.
EURUSD
EURUSD posted four consecutive days of gains after closing Wednesday at 1.17707, nearing the highest levels since September 2021. The pair received positive sentiment following reports of a trade agreement between the U.S. and EU.
During the European session, the release of purchasing managers index (PMI) data from Germany and the Eurozone could drive EURUSD movements. As mentioned earlier, the forecast from Trading Central indicates an improvement in both manufacturing and services PMIs for July. If the data is released above the forecast, there could be additional positive sentiment for EURUSD.
GBPUSD
GBPUSD rose by 474 points (47.4 pips) to 1.35753 during Wednesday’s trading, marking a three-day gaining streak. Improved market sentiment has made the U.S. dollar less appealing, facilitating GBPUSD’s consecutive gains.
GBPUSD could receive additional positive sentiment during the European session if the UK manufacturing and services PMIs are reported better than the forecast.
USDJPY
USDJPY fell to 146.413 during Wednesday’s trading and further declined to 145.854 today, reflecting pressure on the U.S. dollar amid improved market sentiment.
Simultaneously, the yen has gained positive sentiment following the U.S.-Japan trade agreement. These two factors could continue to pressure USDJPY in the European trading session.
Nasdaq
News surrounding the imminent U.S.-EU trade agreement, along with Alphabet’s robust earnings report, propelled the Nasdaq upwards by 212 index points to 23,410, nearing the all-time high of 23,423 set earlier in the week.
The improved market sentiment, combined with optimism surrounding earnings reports, opens the possibility for Nasdaq to reach unprecedented highs in the European trading session.
