Market volatility surged significantly during trading on Wednesday. This high volatility was triggered by U.S. President Donald Trump’s call for Federal Reserve Board member Lisa Cook to resign amid allegations of mortgage fraud.
Additionally, the release of the Federal Open Market Committee (FOMC) minutes revealed that the majority of the Fed board agreed in July to keep interest rates steady. These two factors are expected to impact the market during the European trading session on Thursday (August 20, 2025), alongside the release of several economic data points.
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Here are the data points from Trading Central:
- German Manufacturing PMI (August) at 14:30 WIB; forecast 48.7 vs. previous 49.1
- German Services PMI (August) at 14:30 WIB; forecast 50.3 vs. previous 50.6
- forecast 49.7 vs. previous 49.8
- Eurozone Services PMI (August) at 15:00 WIB; forecast 50.8 vs. previous 51
- UK Manufacturing PMI (August) at 15:30 WIB; forecast 48.6 vs. previous 48
- UK Services PMI (August) at 15:30 WIB; forecast 51.7 vs. previous 51.8
GOLD
Gold prices (XAUUSD) rose by $32.53 per troy ounce during Wednesday’s trading, following Trump’s request for Fed Cook to step down. This action reflects Trump’s intention to install more dovish figures within the Federal Reserve.
However, the FOMC minutes indicated that market participants perceive the Fed may still exercise caution in lowering interest rates.
These two factors could lead to volatility in the gold market, although there is still an upward tendency.
OIL
Oil prices (CLS10) rose by $0.85 to $62.83 per barrel during Wednesday’s trading. Oil previously hit a 2.5-month low, which triggered a buying action.
Furthermore, data from the U.S. indicated a decline in oil inventories by 6 million barrels over the week, adding positive sentiment to the oil market.
These two factors are likely to drive oil prices in the European trading session.
EURUSD
EURUSD experienced volatility during Wednesday’s trading before closing almost unchanged at 1.16479.
The U.S. dollar faced negative sentiment from Trump’s call for Fed Cook to resign. On the other hand, the FOMC minutes revealed that the majority of Fed board members agreed in July to maintain interest rates, which provided positive sentiment, causing EURUSD to be volatile.
In today’s European trading session, the release of the Purchasing Managers’ Index (PMI) for manufacturing and services in Germany and the Eurozone might influence EURUSD. Given the forecasts mentioned earlier that indicate a decline, there is a potential for EURUSD to be pressured if the actual data is released lower than expected.
GBPUSD
GBPUSD fell by 375 points (37.5 pips) to 1.34490 during Wednesday’s trading due to a profit-taking move.
Rising inflation in the UK had previously boosted GBPUSD. However, this price surge also raised risks of an economic slowdown, prompting profit-taking.
In today’s trading, there is potential for profit-taking in GBPUSD to continue if the PMI for manufacturing and services in the UK is released lower than the forecast.
USDJPY
USDJPY fell by 357 points (35.7 pips) to 147.236 during Wednesday’s trading after Trump requested Fed Cook to resign. As previously mentioned, this move underscores Trump’s desire to position more dovish individuals within the Fed.
Conversely, Japan’s composite PMI (manufacturing & services) was reported at 51.9 for August, higher than last month’s 51.6. This release provided positive sentiment for the yen, indicating potential pressure on USDJPY.
NASDAQ
The Nasdaq dropped by 154 index points to 23,318 in Wednesday’s trading. The continued decline of tech stocks resulted in the Nasdaq marking six consecutive days of decrease.
There is potential for this downturn to persist in the European trading session, considering the sharp increases the Nasdaq has experienced this year, which could trigger profit-taking.
