The President of the United States, Donald Trump, has once again instigated significant volatility in the financial markets during trading on Thursday. Trump signed an executive order implementing a reciprocal policy, which could have lasting implications.
Under this new policy, if other countries raise import tariffs on goods from the United States, then Trump will respond by increasing tariffs on imports from those countries as well. However, Trump mentioned that his nominee for Secretary of Commerce, Howard Lutnick, is tasked with conducting a study to determine the appropriate tariff levels.
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This policy change has led to heightened volatility in the financial markets, and its effects are expected to carry over into trading on Friday.
GOLD
The price of Gold (XAUUSD) surged by $24.27, or 242.7 pips, reaching $2,928.24 per troy ounce during trading on Thursday. This morning, Gold saw further gains, rising to $2,933.79 per troy ounce, getting close to its all-time high of $2,942 from Tuesday.
Gold’s rise is attributed to the pressure on the U.S. dollar in response to Trump’s latest policy move. Furthermore, the global economy continues to face uncertainties, prompting traders to flock to Gold as a safe haven. Additionally, central banks are still accumulating Gold as part of their foreign reserve strategy.
This sentiment is likely to continue influencing Gold prices during today’s European trading session.
OIL
The Oil price (CLS10) briefly dropped to a six-week low of $70.21 per barrel on Thursday before rebounding to close at $71.49 per barrel.
Trump’s reciprocal policy, which is not set to take effect imminently, has diminished the risk of a large-scale trade war, creating a positive outlook for Oil prices that is expected to carry through to the European trading session.
EURUSD
EURUSD skyrocketed 824 points (82.4 pips) to reach 1.04656 during Thursday’s trading, marking its third consecutive day of gains. The appeal of the U.S. dollar as a safe haven asset has waned since Trump’s reciprocal policy will not be implemented right away. Initially, market participants anticipated that the policy would take effect this week.
This sentiment is likely to continue influencing the EURUSD movement during the European trading session.
GBPUSD
Similar to EURUSD, the GBPUSD pair experienced a significant boost during Thursday’s trading session, rising by 1,229 points (122.9 pips) to 1.25659, marking a one-month high.
The pressure on the U.S. dollar was a key factor in this increase, alongside better-than-expected economic growth data (Gross Domestic Product/GDP) from the UK in the fourth quarter of 2024. This sentiment will still likely impact GBPUSD in today’s European session.
USDJPY
The USDJPY pair fell to 152.799 during Thursday’s trading, nearly reversing a gain of over 190 pips from the previous day. The volatility in this currency pair is quite high, making it appealing to traders.
The U.S. dollar appears less attractive after Trump indicated the reciprocal policy won’t materialize soon, exerting pressure on USDJPY. This sentiment will likely continue influencing its movements during the European trading session.
Nasdaq
With decreasing risks of a major trade war, the Nasdaq index rose by 213 points to 22,074 during Thursday’s trading. Today, the Nasdaq climbed further to 22,146, inching closer to its all-time high of 22,151 set on December 16.
The ongoing positive sentiment surrounding the Nasdaq opens up strong possibilities for breaking the all-time record during today’s European trading session.
