The European currencies are experiencing strong momentum at the start of the European trading session on Wednesday (February 5, 2025). Significant fluctuations may occur later today in response to the release of data from the United States (US).
Here’s the data from Trading Central:
Recommended
Recommended
Recommended
Recommended
- ADP employment data for the US (February); forecast 160K vs previous 183K
- ISM Services Purchasing Managers’ Index (February); forecast 52.7 vs previous 52.8
GOLD
Gold prices (XAUUSD) are fluctuating within the range of US$ 2,901 – US$ 2,922 per troy ounce at the start of the European session. The performance of gold is still benefiting from the pressure felt by the US dollar due to the strengthening of the euro and pound.
In tonight’s trading, gold could gain additional positive sentiment if US economic data is released lower than forecast.
OIL
As per the previous Macro Overview projection, oil prices (CLS10) fell in early European trading, hitting a daily low of US$ 67.15 per barrel.
OPEC+’s plan to increase production starting next month is putting downward pressure on oil prices. Additionally, signs of an economic slowdown in the US are also contributing to negative sentiment. Thus, if US economic data released tonight is worse than forecast, oil could face further declines.
EURUSD
EURUSD soared nearly 1,000 points (100 pips) to 1.07222 at the start of the European session. This level marks the highest since November 11 of last year. Yesterday, this currency pair surged over 135 pips in response to a reform proposal from the coalition party CDU/CSU, which won the elections on Sunday (February 23, 2025).
The coalition proposed on Tuesday to release €500 billion for infrastructure development. Furthermore, they intend to reform the fiscal deficit rule currently set at 0.35% of Gross Domestic Product (GDP) to more than 1%.
The release of the Eurozone Producer Price Index (PPI) inflation data showing 1.8% year-on-year (YoY) in January, which exceeded the Trading Central forecast of 1.3%, adds positive sentiment for EURUSD. Should US economic data tonight fall below forecast, EURUSD could gain additional positive sentiment.
GBPUSD
The sharp rise in EURUSD has also boosted GBPUSD, which reached a level of 1.28541 at the start of the European session. This level is the highest in nearly four months.
GBPUSD is also benefiting from a series of strong economic data from the UK, which suggests that the Bank of England (BoE) is unlikely to lower interest rates in the near term. Additionally, the UK and US are expected to reach a trade agreement, sparing any increase in import tariffs.
These various sentiments will continue to influence GBPUSD’s movements in tonight’s trading.
USDJPY
USDJPY is moving within a volatile range of 149.092 – 150.184 at the start of the European session. The US dollar is weak, while the yen is also under pressure as the market anticipates that the Bank of Japan (BoJ) will not raise interest rates this month.
However, if US economic data released tonight is worse than forecast, there is a possibility that USDJPY may receive negative sentiment again.
Nasdaq
The Nasdaq is fluctuating within a range of 20,075 – 20,628 at the start of the European session. Market participants are awaiting clarity on import tariffs that President Trump will impose on Canada and Mexico.
As is known, a 25% tariff has been in effect since Tuesday in US time. However, US Secretary of Commerce Howard Lutnick mentioned that President Trump may compromise on the proposed increase in tariffs. It is still unclear what form of compromise will be offered. Without clarity, there is potential for the Nasdaq to face pressure again, especially if the US economic data released tonight is worse than forecast.
