The release of inflation data (Consumer Price Index/CPI) for the United States on Wednesday triggered significant movements in the financial markets.
Inflation for the month of February was reported to have grown by 2.8% year-on-year (YoY), lower than the forecast of 2.9% YoY by Trading Central and down from the previous month’s rate of 3% YoY. Meanwhile, the core CPI, which excludes food and energy prices, showed a growth of 3.1% YoY, matching the forecast from Trading Central and lower than the prior month’s figure of 3.3% YoY.
Recommended
Recommended
Recommended
Recommended
This decrease in inflation opens up greater possibilities for the Federal Reserve to cut interest rates, especially amidst ongoing concerns regarding an economic slowdown in the United States.
This sentiment is expected to continue influencing market movements during the European trading session on Thursday (March 13, 2025).
GOLD
Gold prices (XAUUSD) surged over $17 or 170 pips to reach $2,933.09 per troy ounce in Wednesday’s trading, continuing to climb today to $2,947.16 per troy ounce. Gold is nearing its all-time high of $2,956.21 per troy ounce reached on February 24.
The rise in gold prices followed the release of U.S. inflation data, which enhances the likelihood of interest rate cuts from the Federal Reserve. As rates decrease, gold typically receives a positive sentiment.
OIL
Oil prices (CLS10) increased by $1.09 to $67.68 per barrel on Wednesday, marking a two-day consecutive rise. This increase in oil prices is likely the result of short covering after previously hitting the lowest levels since April 2023.
However, oil prices still face negative sentiment due to the risk of an economic slowdown in the United States which could reduce demand. On the other hand, OPEC+ is also planning to increase production, indicating potential increases in global supply. This sentiment will continue to impact oil movements, making it vulnerable to reversals.
EURUSD
EURUSD, which reached a four-month high, faced profit-taking actions that brought it down by 322 points (32.2 pips) to 1.08871. In addition to profit-taking, negative sentiment emerged from the European Union’s trade tensions with the United States after President Trump raised import tariffs on steel and aluminum from all countries.
Germany, being one of the largest steel exporters to the United States, faces pressure from this trade dispute, affecting the EURUSD exchange rate.
GBPUSD
GBPUSD managed to record a gain of 130 points (13 pips) to 1.29624 at the beginning of trading on Wednesday, sustaining its four-month high. In contrast to the European Union, the UK has yet to retaliate against the U.S. steel tariff increase, which means the two countries have not engaged in direct trade hostilities.
Furthermore, UK’s Prime Minister Keir Starmer stated a preference for pragmatic steps. Last month, Trump indicated that the U.S. and the UK might reach a bilateral agreement to avoid tariff increases.
The market appears to see continued chances for the two countries to establish a trade agreement, which could stabilize GBPUSD’s performance. However, given its high position, there is potential for profit-taking during the European trading session.
USDJPY
USDJPY has noted two consecutive days of increase, closing Wednesday’s trading at 148.252. However, it has dropped to 147.736 today following short covering actions.
The release of U.S. inflation data indicating slowing growth exerts pressure on the U.S. dollar. Additionally, with signs of economic slowdown, negative sentiment continues to affect USDJPY.
Nasdaq
The Nasdaq index recorded an increase of 171 points to 19,570 during Wednesday’s trading but has fallen back to 19,436 today. This indicates continued negative sentiment influencing the Nasdaq, primarily stemming from risks associated with an economic slowdown in the U.S. and escalating trade tensions.
Such sentiment is likely to affect Nasdaq movements during the European trading session.
