The market exhibited relatively stable movement at the onset of the European trading session on Monday (March 3, 2025), following a highly volatile morning. Traders responded to the developments from the weekend and are awaiting clarity regarding President Donald Trump’s impending tariff hikes on imports from Canada, Mexico, and China, which are set to take effect on March 4 local time.
Additionally, the release of the US Manufacturing Purchasing Managers’ Index (PMI) by ISM at 22:00 WIB could serve as a significant market mover. Trading Central forecasts that the February PMI will be at 51, showing a slight increase from last month’s figure of 50.9.
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GOLD
Gold (XAUUSD) has continued to struggle in maintaining its upward trajectory after an initial surge of nearly US$ 20 or 200 pips to reach US$ 2,876.86 per troy ounce earlier today. The precious metal’s rally was curtailed as hopes for an end to the Russia-Ukraine conflict resurfaced.
As previously mentioned in the Macro Overview, tensions between President Trump and Ukrainian President Volodymyr Zelensky had dampened optimism for a resolution. However, UK Prime Minister Keir Starmer stated over the weekend that European leaders are prepared to assist Ukraine in formulating a peace proposal, which will then be presented to Trump.
This development has rekindled hopes for a resolution to the three-year-long conflict, influencing gold prices to stabilize. There is also a likelihood that gold may face downward pressure tonight if the US manufacturing PMI is released stronger than expected.
OIL
Crude oil prices (CLS10) have reversed course, dipping to US$ 69.25 per barrel after having reached US$ 70.58 per barrel earlier in the day. The earlier surge in oil prices followed data indicating that China’s Caixin Manufacturing PMI showed its highest expansion in three months.
This downturn in oil prices suggests lingering concerns about economic conditions amid ongoing trade tensions. Nevertheless, if the US manufacturing PMI released tonight surpasses expectations, oil may regain some positive momentum.
EURUSD
EURUSD climbed to 1.04389 in the early European session, reacting to the reported inflation data (Consumer Price Index/CPI) for the Eurozone. The core CPI was reported to grow by 2.6% year-on-year, exceeding the forecast of 2.5% provided by Trading Central.
The stronger-than-expected core CPI could influence the European Central Bank’s (ECB) decision regarding potential interest rate cuts. Furthermore, prospects for the resolution of the Russia-Ukraine conflict contribute positively to EURUSD, which is likely to affect its movement in tonight’s trading.
GBPUSD
GBPUSD showed an upward movement in early European trading, reaching a daily high of 1.26388. Compared to Friday’s close, GBPUSD increased by 611 points (61.1 pips).
Expectations around the conclusion of the Russia-Ukraine conflict offer positive sentiment for GBPUSD. Moreover, the likelihood that the UK may avoid Trump’s tariff hikes continues to support GBPUSD’s performance. Last week, PM Starmer mentioned that the UK and the US are likely to reach a trade agreement.
This sentiment could continue to influence GBPUSD’s movement during tonight’s trading.
USDJPY
USDJPY exhibited volatility within a broad range of 149.942 – 151.022 as the European session began. This movement suggests a tug-of-war between two currencies regarded as safe havens.
If the US manufacturing PMI reported tonight is above 51, there could be positive sentiment for USDJPY.
Nasdaq
The Nasdaq index has shown volatility within a range of 20,839 – 21,034 as the European session commenced following a rebound from a three-month low last Friday.
There is potential for the Nasdaq to feel pressure during tonight’s trading as market participants await clarification on President Trump’s tariff hike plans due tomorrow.
