The US dollar experienced a resurgence during Thursday’s trading session following the release of encouraging economic data. The preliminary report of the Purchasing Managers’ Index (PMI) from S&P Global indicated expansions in both the manufacturing and services sectors in the US this month.
The manufacturing PMI was reported at 52.3, surpassing the forecast from Trading Central of 50.3 and the previous month’s figure of 50.2. Meanwhile, the services PMI was reported at 52.1, also above the previous month’s 50.6 and countering a forecast prediction of a decline to 50.4.
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A PMI reading above 50 indicates expansion, with higher figures reflecting stronger growth. However, the impact of this data appeared short-lived, as the US dollar faced pressure again during trading on Friday (May 23, 2025).
GOLD
After a three-day rally, the price of Gold (XAUUSD) fell by over $20 or 200 pips to $3,294.34 per troy ounce in Thursday’s trading. The strengthening of the US dollar triggered profit-taking in Gold.
Nevertheless, the US dollar faced further pressure in today’s trading. Market participants are concerned that the tax and spending proposals from President Donald Trump could exacerbate national debt and fiscal deficits. Such concerns could pose long-term challenges for the US economy.
These issues regarding debt and fiscal deficits have also prompted Moody’s to downgrade the US credit rating. This sentiment continues to exert pressure on the US dollar while simultaneously increasing demand for Gold as a safe haven.
OIL
Oil prices (CLS10) dropped by $0.53 to $60.79 per troy ounce in Thursday’s trading. Despite the manufacturing PMI data indicating an expansion, which suggests potential increases in oil demand, oil prices continued their downward trajectory.
Further pressure on oil prices came from data showing a rise in inventory levels in the United States. This sentiment is likely to influence oil trading during the European session.
EURUSD
The decline in German manufacturing and services PMIs led to a decrease in the EURUSD by 516 points (51.6 pips) to 1.12766 during Thursday’s trading. However, today the EURUSD reversed course, climbing to 1.13211, almost negating yesterday’s decline.
This movement indicates that the US dollar is still under significant pressure, which could persist during the European trading session.
GBPUSD
GBPUSD closed flat at 1.34121 during Thursday’s trading after experiencing volatile movements. This currency pair is still influenced by a positive sentiment stemming from rising inflation in the UK, which suggests that the Bank of England (BoE) may not cut interest rates anytime soon.
In today’s trading, GBPUSD has risen to 1.34550, and the release of UK retail sales data at 13:00 WIB could determine the next market movement. The forecast from Trading Central predicts that retail sales for April will grow by 4.2% year-on-year (YoY), which is higher than the previous month’s growth of 2.6% YoY.
GBPUSD may receive additional positive sentiment if the data released exceeds the forecast.
USDJPY
USDJPY climbed by 350 points (35 pips) to 143.935 during Thursday’s trading, recovering from a drop to 142.801. The sharp decline in the preceding days, along with the release of favorable economic data from the US, triggered a short covering that pushed USDJPY upward.
However, in today’s trading, USDJPY has fallen back to 143.356, underscoring the significant pressure on the US dollar. The downward pressure on USDJPY may continue during the European session.
Nasdaq
The Nasdaq recorded a slight increase of 69 index points to 21,214 on Thursday, buoyed by positive sentiment from better-than-expected US economic data.
However, as mentioned earlier, market participants are now focusing on the potential risks of rising national debt and fiscal deficits in the US, which are weighing on sentiment towards the Nasdaq.
