The United States dollar rose strongly in trading on Wednesday, despite the ADP employment report showing numbers that fell significantly short of expectations. The dollar’s strength is attributed to speculation that President-elect Donald Trump is considering emergency measures to implement higher import tariffs. This sentiment is likely to continue influencing market movements through Thursday’s trading session.
GOLD
Gold prices (XAUUSD) have increased for two consecutive days, closing Wednesday’s session at $2,661.46 per troy ounce. Over the past two days, the total rise has surpassed $25, equating to 250 pips.
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The release of the ADP data reporting a revised 122,000 jobs for December 2024 fueled the rise in Gold. This figure was significantly below the forecast of 140,000 jobs. Additionally, news regarding Trump contributed positively to Gold’s sentiment, which is expected to persist in the European trading session.
OIL
Profit-taking activities led to a $1.10 decline in Oil prices (CLS10), settling at $73.31 per barrel on Wednesday. Prior to this, oil had peaked at $75.27 per barrel, marking the highest level in nearly three months.
The EIA’s report on U.S. gasoline stocks provided negative sentiment that catalyzed the profit-taking. There remains a possibility that these activities may continue during the European session today.
EURUSD
The EURUSD exchange saw a drop of 198 points (nearly 20 pips) to 1.03192 during Wednesday’s session after it briefly fell to 1.02732. This currency pair is approaching its lowest level since November 2022.
During the European session, the release of German industrial production data at 14:00 WIB and Eurozone retail sales at 17:00 WIB could act as catalysts for EURUSD movements.
The forecasts from Trading Central estimate that German industrial production will increase by 0.8% month-on-month in November, compared to the previous decline of -1%. Meanwhile, Eurozone retail sales are predicted to rise by 0.1% month-on-month, after a decrease of -0.5% in October.
Such data could provide a positive sentiment for EURUSD if announced higher than the forecasts.
GBPUSD
GBPUSD fell sharply by 1.126 points (112.6 pips) to 1.23627 on Wednesday, continuing its decline into today’s trading.
This drop brought GBPUSD close to its lowest point in nine months, amid a sell-off in the UK stock and bond markets. The market’s pessimism about the UK economy’s outlook for this year has negatively impacted GBPUSD.
USDJPY
USDJPY noted three consecutive days of gains, ending Wednesday’s trading at 158.325. This is the highest level seen in almost six months.
The strength of the US dollar, bolstered by news of potential impending tariffs by Trump, has driven USDJPY higher. This sentiment is expected to influence USDJPY’s movements in the European trading session as well.
Nasdaq
The Nasdaq index dropped by 50 points to 21,375 during Wednesday’s trading following massive sell-offs from the previous day. Speculation about Trump’s imminent tariff increases added pressure to the Nasdaq.
This sentiment is likely to continue impacting the Nasdaq during the European trading session.
