The pressure on the United States dollar continues as trading opens in Europe on Friday (May 23, 2025). The dollar is facing challenges as market participants worry that the tax and spending proposals from President Donald Trump could lead to a significant increase in national debt and fiscal deficits. This situation raises concerns about the long-term economic impact on the United States.
This sentiment is expected to influence market movements during tonight’s trading session, alongside the release of new home sales data from the US at 21:00 WIB. According to Trading Central’s forecasts, April’s new home sales are expected to decline by 4.7% month-on-month (MoM), a drop from the previous month’s growth of 7.4% MoM.
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GOLD
The price of Gold (XAUUSD) continued to rise as European trading commenced, reaching a daily high of $3,334.35 per troy ounce. Compared to Thursday’s closing prices, Gold has increased by over $40 or 400 pips.
Concerns regarding a growing national debt and fiscal deficits in the United States are not only weighing on the dollar but also driving demand for Gold as a safe-haven asset. These two factors combined are contributing to today’s rise in Gold prices.
Gold might receive additional positive sentiment if tonight’s US economic data is worse than the forecasted figures.
OIL
After experiencing declines for two consecutive days, Oil (CLS10) has rebounded at the start of European trading, reaching a daily high of $61.19 per barrel. The pressure on the US dollar is providing a positive sentiment for Oil. When the dollar depreciates, Oil becomes relatively cheaper for holders of other currencies, which could boost demand.
This means that if tonight’s US economic data proves to be worse than the forecast, Oil could gain further positive sentiment.
EURUSD
The weakness of the US dollar has propelled the EURUSD upward at the beginning of European trading, touching a daily high of 1.13578. Compared to Thursday’s close, EURUSD has increased by 812 points (81.2 pips).
This currency pair may receive additional positive sentiment if the new home sales data from the US comes in lower than the anticipated -4.7%.
GBPUSD
GBPUSD surged above 1.35000 for the first time since mid-February 2022 as European trading opened. Compared to Thursday’s close, GBPUSD jumped nearly 90 pips.
The positive sentiment for GBPUSD followed data indicating that retail sales in the UK rose by 5% year-on-year (YoY) in April, outperforming Trading Central’s forecast of 4.2% and the previous month’s growth of 2.6%. This positive sentiment could be further enhanced if the US economic data is worse than the forecast.
USDJPY
As of this afternoon, the USDJPY has dropped by 792 points (79.2 pips) to a level of 143.143. Prior to today, the USDJPY had fallen in 6 out of the last 8 trading days, indicating significant pressure on the US dollar.
The downward pressure on the USDJPY could increase if the US economic data released tonight falls short of expectations.
Nasdaq
The Nasdaq index has declined during the early European trading session, hitting a daily low of 21,092. Concerns about growing debt and fiscal deficits in the US have cast a negative sentiment over the stock index, including the Nasdaq.
This sentiment is likely to continue affecting Nasdaq movements, and could worsen further if the released US economic data is lower than expected.
