The release of economic data from the Eurozone and the UK significantly impacted market movements during the early European trading session on Friday (February 21, 2025). The US dollar has gained strength following pressure experienced on Thursday. Several economic indicators from the US tonight are likely to spike market volatility.
Here are the data points from Trading Central:
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- US Manufacturing PMI (February) at 21:45 WIB; forecast 51.3 compared to a prior 51.2
- US Services PMI (February) at 21:45 WIB; forecast 52.7 compared to a prior 52.9
- US Existing Home Sales (January) at 22:00 WIB; forecast 4.16M compared to a prior 4.24M
GOLD
The appreciation of the US dollar has led to profit-taking in gold during the early European trading session, pushing prices down to $2,916.71 per troy ounce after briefly climbing to $2,949.70 earlier today.
Gold remains close to its all-time high of $2,954 per troy ounce recorded last Thursday, making it vulnerable to profit-taking. However, if the economic data from the US tonight falls short of expectations, there could be a renewed positive sentiment towards gold.
OIL
After witnessing four consecutive days of gains, oil prices fell to $71.63 per barrel due to profit-taking activities. Compared to Thursday’s trading close, oil decreased by $0.94.
Oil had enjoyed a streak of four days of increases following unsuccessful peace talks between Russia and Ukraine. Nevertheless, the US as the primary facilitator plans to engage in further discussions with Russia.
This suggests that there is still a possibility for peace between the two nations, which could lead to the lifting of sanctions on Russian oil and an oversupply in the market. Such conditions have triggered profit-taking in oil, with potential continuation into tonight’s trading.
EURUSD
EURUSD witnessed a decline at the early stages of the European session after surging nearly 800 points (80 pips) on Thursday. The currency pair hit a daily low of 1.04657, dropping 35 pips.
Despite the release of favorable Purchasing Managers’ Index (PMI) data for manufacturing and services from Germany and the Eurozone this afternoon, EURUSD declined. This drop likely resulted from profit-taking; thus, there is potential for positive sentiment if the US economic data this evening is worse than the forecast.
GBPUSD
Profit-taking also affected GBPUSD, which fell to 1.26419 after inched upwards to 1.26785 earlier; this level represents the highest point in two months.
Retail sales and PMI data from the UK released this afternoon were also quite encouraging. This information, along with prior data, provides a good basis for the Bank of England (BoE) to maintain higher interest rates a little longer.
This situation fosters a positive sentiment for GBPUSD and could potentially augment if the US economic data released tonight underperforms relative to the forecast.
USDJPY
During the early European session, USDJPY experienced an increase after a sharp drop on Thursday, reaching 149.259, the lowest level in 11 weeks. USDJPY then rebounded to 150.733, climbing 1.124 points (112.4 pips).
The sharp decline and the current low position of USDJPY prompted a short-covering drive heading into the weekend, resulting in the rebound. Nevertheless, if the evening’s economic data from the US falls below expectations, USDJPY may face selling pressure again.
Nasdaq
Nasdaq has remained relatively stable at the beginning of the European trading session, trading within the range of 22,104 – 22,175. Currently, Nasdaq is close to its all-time high, with global economic uncertainties stemming from President Donald Trump’s import tariff policies potentially inciting profit-taking during tonight’s trading.
On Wednesday, Trump announced his intent to raise tariffs on certain products shortly, negatively influencing Nasdaq sentiment.
