The President of the United States has confirmed a 25% increase in import tariffs from Canada and Mexico, set to take effect on March 4; financial markets are once again experiencing turmoil.
In addition, tariffs on imports from China have been raised by 10%, with a threat to increase tariffs on the European Union by 25%. This sentiment is likely to continue impacting market movements on Friday (February 28, 2025).
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GOLD
The price of gold (XAUUSD) dropped nearly $40 or 400 pips, settling at $2,876.69 per troy ounce on Thursday, and further decreased to $2,856.87 per troy ounce by midday today. This marks the lowest level in over two weeks.
The decline in gold prices is attributed to profit-taking actions and a significant rise in the US dollar due to increasing risks of a broader trade war. This sentiment is expected to influence gold’s movement during the European trading session, ahead of the core inflation data based on Personal Consumption Expenditures (PCE) being released tonight.
OIL
Oil prices (CLS10) increased by $1.3, reaching $70.11 in Wednesday’s trading session. This rise occurred after President Trump revoked Chevron’s export permit for oil from Venezuela, which accounted for 240,000 barrels per day. Consequently, global supply will decrease, creating a positive sentiment for oil.
Additionally, the proposed increase in import tariffs from Canada has also contributed to this positive sentiment, given that imported oil from Canada will incur tariffs under Trump’s plan. This outlook is expected to influence oil prices during the European session.
EURUSD
The EURUSD pair fell by 855 points (85.5 pips) to 1.03971 in Thursday’s trading. Trump’s threat to raise import tariffs on the European Union has exerted pressure on the EURUSD pair.
In today’s European session, the release of Germany’s retail sales data at 14:00 WIB could significantly move the EURUSD. The forecast indicates that retail sales in January will grow by 1.5% year-on-year (YoY), a decrease from the previous month’s growth of 1.8% YoY.
This data could further pressure the EURUSD if it is released below the forecast levels.
GBPUSD
The risk of an escalating trade war has also placed downward pressure on GBPUSD, resulting in a drop from its highest level in two months. This currency pair decreased by 729 points (72.9 pips) to 1.26002.
Today, GBPUSD fell further to 1.25803, with potential for continuation during the European session. The increasing risk of a broader trade war has heightened the appeal of the US dollar as a safe haven.
USDJPY
The USDJPY pair rose by 737 points (73.7 pips) to 149.787 in Thursday’s trading, moving away from a four-month low hit on Tuesday. In today’s trading, USDJPY has experienced high volatility, moving between 149.096 and 150.144.
Both the US dollar and the yen are considered safe havens, thus contributing to elevated volatility. However, given the recent low levels of USDJPY and the upcoming release of US PCE inflation data tonight, a short covering action has created a positive sentiment for USDJPY.
Nasdaq
The Nasdaq index fell by 640 points to 20,632 during Thursday’s trading, and continued to decline to 20,516 this morning. This marks the lowest level in more than three months. The increasing risks of a broader trade war have negatively impacted stock indices, including Nasdaq.
This sentiment is expected to continue affecting Nasdaq’s movements during the European trading session.
