Market volatility remained elevated during trading on Thursday, influenced by the political climate between the United States and China regarding trade wars, as well as several economic indicators from Europe and the US.
The market movements for today, Friday (February 7, 2025), are expected to be more pronounced, as the US labor market data, including non-farm payrolls (NFP), is set to be released later tonight.
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GOLD
The price of Gold (XAUUSD) dropped by US$ 11.26 or 112.6 pips, settling at US$ 2,855.75 per troy ounce. This decline in Gold is attributed to profit taking after hitting an all-time high for five consecutive days.
The most recent record for Gold was observed last Wednesday at around US$ 2,882 per troy ounce. Today, Gold has bounced back to US$ 2,870.43 per troy ounce, confirming that yesterday’s drop was primarily due to profit taking.
Economic data released from the US yesterday revealed unemployment claims that exceeded expectations, which has created a positive sentiment for Gold ahead of the NFP data release.
OIL
Oil prices (CLS10) fell by US$ 0.63 to US$ 70.50 per barrel during Thursday’s trading after peaking at US$ 71.82 per troy ounce. Oil is currently at its lowest level in five weeks, facing pressure due to a significant increase in US stock levels. Furthermore, concerns over the second trade war are raising fears of a decline in global oil demand.
These sentiments will likely affect Oil’s movements during the European trading session.
EURUSD
EURUSD declined by 198 points (19.8 pips) during Thursday’s trading, reaching 1.03827, despite data from Germany and the Eurozone coming in higher than anticipated.
This indicates that market participants still see considerable uncertainty ahead, particularly regarding US policies and their global impact. Such sentiment is expected to influence EURUSD’s movement in European trading, alongside the release of German industrial production data at 14:00 WIB.
Forecast from Trading Central anticipates a month-on-month decrease of -0.6% in industrial production for December, compared to a previous increase of 1.5% MoM. This data could put additional pressure on EURUSD should it come in lower than the forecast.
GBPUSD
GBPUSD plummeted by 696 points (69.6 pips) to 1.24342 during trading on Wednesday. The Bank of England (BoE) reduced interest rates by 25 basis points to 4.5%, adding pressure on GBPUSD.
Moreover, two BoE board members indicated that a more significant cut in interest rates may be necessary, suggesting potential additional reductions in the near future. On the other hand, the BoE forecasts a rise in inflation alongside weakening economic growth. This scenario puts the UK at risk of stagflation, which negatively affects GBPUSD sentiment.
USDJPY
USDJPY fell by 1.137 points (113.7 pips) to 151.451 during Thursday’s trading, marking its lowest level in the past six weeks. This currency pair has declined for three consecutive days, fueled by a strengthening yen.
Recent data from Japan indicated a significant increase in average wages. Additionally, BoJ officials signaled the possibility of interest rate hikes, further bolstering the yen. Conversely, rising unemployment claims in the US are exerting pressure on USDJPY.
Nasdaq
The Nasdaq experienced volatility before recording an increase of 74 index points to 21,843 in Thursday trading. The ongoing volatility suggests that market participants are still awaiting developments regarding the US-China trade war and President Trump’s meeting with Xi Jinping.
This scenario implies that Nasdaq could face further pressure during the European trading session.
