Signs of an economic slowdown in the United States are becoming increasingly apparent. On Wednesday, the report for new home sales in January showed a significant decline of -10.5% month-on-month (MoM), which was much worse than the Trading Central forecast of -2.6% and a stark contrast to the previous month’s growth of over 8%.
This release will continue to influence market movements in Thursday’s (February 27, 2025) trading.
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GOLD
The price of Gold (XAUUSD) dipped to $2,890 per troy ounce on Wednesday before rebounding following the release of U.S. new home sales data. Gold closed trading on Wednesday at $2,915.92 per troy ounce, marking a slight increase compared to Tuesday’s market close.
Gold’s volatility remains extremely high as it hovers near its all-time peak of $2,956 per troy ounce. By noon today, Gold experienced another drop due to profit-taking, falling to $2,890.84 per troy ounce, reflecting a decrease of over $25 (250 pips).
The profit-taking trend is likely to persist in the European session, as Trump indicated that the hike in import tariffs from Canada and Mexico will not take effect until April 2, contrary to earlier statements suggesting it could start next month.
OIL
Oil prices (CLS10) continued to decline in Wednesday’s trading, even hitting a low of $68.37 per barrel, which is the lowest level since December 10.
Oil is under pressure due to increasing signs of an economic slowdown in the U.S., which risks reducing demand, potentially leading to further declines in oil prices.
EURUSD
EURUSD fell by 307 points (30.7 pips) to 1.04826 in Wednesday’s trading, pressured by the release of consumer sentiment data from Germany, which showed a downturn. Additionally, EURUSD faced downward pressure after Trump announced plans for import tariffs on cars and other products from Europe.
In the afternoon, the release of France’s Producer Price Index (PPI) at 14:45 WIB could impact the EURUSD exchange rate. The Trading Central forecast suggests that the January PPI could be -2.4% year-on-year (YoY), a decline from the previous month’s -3.8% YoY. Any negative release, especially one worse than the forecast, could exert more downward pressure on EURUSD, as negative PPI points to possible declines in inflation (Consumer Price Index/CPI).
GBPUSD
GBPUSD registered a slight increase to 1.26731 in Wednesday’s trading, approaching the highest level seen in two months. A diminished likelihood of the Bank of England (BoE) cutting interest rates in the near term has contributed positively to GBPUSD.
However, the potential for the United States to raise import tariffs on Europe now casts a shadow of negativity over GBPUSD.
USDJPY
USDJPY ended the day unchanged at 149.050 on Wednesday after experiencing volatile movements. USDJPY remains close to a four-month low, indicating a strengthening yen as the Bank of Japan (BoJ) could raise interest rates soon.
This sentiment will likely continue to affect USDJPY’s movement during the European trading session, although there is a chance for short covering, leading to more volatility.
Nasdaq
The Nasdaq index exhibited high volatility before closing Wednesday’s session at 21,272, showing a slight increase compared to the previous day’s close. The index gained traction after Nvidia reported better-than-expected earnings, alongside Trump’s remarks indicating that the import tariff hikes from Canada and Mexico would not take effect until April 2.
Nonetheless, increasing signs of an economic slowdown in the U.S. are expected to weigh negatively on the Nasdaq during today’s trading, as market participants monitor the certainty of Trump’s tariff policy.
