The financial markets experienced high volatility during Tuesday’s trading session, and this trend may continue into Wednesday (March 19, 2025) as the U.S. Federal Reserve is set to announce its monetary policy.
GOLD
Gold prices (XAUUSD) surged by over $32 or 320 pips during Tuesday’s trading session, and today they rose again to $3,045.33 per troy ounce, reaching an all-time high.
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The escalation of conflict between the United States and the Houthi movement in the Middle East, the risks of a broader trade war, and a slowdown in the U.S. economy have contributed to the rise in gold prices. This sentiment is expected to continue affecting movements in the European trading session ahead of the Fed’s interest rate announcement.
OIL
Oil prices (CLS10) briefly increased to $68.70 per barrel before reversing direction and closing Tuesday’s trading at $66.58 per barrel.
The tensions in the Middle East initially bolstered oil prices; however, they dropped sharply after the U.S. engaged in negotiations with Russia for a ceasefire with Ukraine. If successful, there is a possibility that sanctions on Russia’s energy sector will be relaxed, which could increase global supply.
This sentiment is likely to affect oil prices in the upcoming European trading session.
EURUSD
EURUSD exhibited significant volatility during Tuesday’s trading, ultimately closing at 1.09447, up 234 points (23.4 pips). The pair received a boost from positive data indicating a sharp rise in economic sentiment within Germany and the Eurozone this month.
Additionally, the German Parliament approved a fiscal reform plan that has bolstered the EURUSD’s performance, driving it to a four-month high. This sentiment is expected to continue influencing EURUSD movements in the European trading session.
GBPUSD
GBPUSD recorded a slight increase of 111 points (11.1 pips), reaching 1.30010 in Tuesday’s trading after dropping to 1.29511.
This movement indicates that market participants are awaiting the monetary policy announcement from the Bank of England (BoE). There is potential for the central bank to adopt a slightly hawkish stance as inflationary pressures resurface in the UK, providing a positive sentiment for GBPUSD.
This sentiment will likely continue influencing GBPUSD movements in the European session.
USDJPY
USDJPY closed unchanged at 149.262 during Tuesday’s trading, as market players waited for the monetary policy announcement from the Bank of Japan (BoJ) today. As anticipated by the market, the BoJ maintained interest rates at 0.5%, but there were no significant movements in USDJPY.
Market participants are looking forward to the press conference held by the BoJ later today to gauge when interest rates might be raised again, which could lead to increased volatility in USDJPY during the European trading session.
Nasdaq
The Nasdaq index plummeted by 335 points to 19,495 during Tuesday’s trading, marking the end of a two-day upward trend. This movement highlights the ongoing pressure on the Nasdaq due to trade war risks and the slowing U.S. economy.
Negative sentiment surrounding the Nasdaq is expected to persist ahead of the Fed’s interest rate announcement.
