The United States Dollar is under pressure following a decrease in the likelihood of a large-scale trade war with China. The dynamics of this trade tension will continue to influence market movements during Thursday’s trading (February 6, 2025). In the European trading session, several data points from the continent are also expected to impact the market.
Here are the details from Trading Central:
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- German factory orders (month-on-month/December) at 14:00 WIB; forecast 1.5% vs previous -5.4%.
- Eurozone retail sales (month-on-month/December) at 17:00 WIB; forecast 0.3% vs previous 0.1%.
- Eurozone retail sales (year-on-year/December) at 17:00 WIB; forecast 1.7% vs previous 1.3%.
GOLD
The price of Gold surged, breaking the all-time record of $2,882.18 per troy ounce, before retracting and closing Wednesday’s trading at $2,867.01 per troy ounce.
Gold has established a new all-time high for five consecutive days due to heightened demand for safe haven assets. This increase is attributed to ongoing uncertainties, particularly relating to various policies enacted by US President Donald Trump, which have global repercussions, including increased import tariffs.
Moreover, even with the current small-scale trade war, it is anticipated that the Chinese central bank will aggressively purchase Gold to bolster its foreign reserves.
This sentiment is still expected to influence market movements during today’s European trading session, along with potential profit-taking due to the recent sharp rally in Gold prices.
OIL
Oil prices (CLS10) fell by $1.57 to $72.13 per barrel on Wednesday, nearing the lowest level in the past five weeks.
This decline is a result of a significant increase in US stockpiles. Furthermore, concerns about the trade war reducing global oil demand continue to loom negatively over the market. Such sentiments are likely to affect Gold trading in the European session as well.
EURUSD
EURUSD increased by 254 points (25.4 pips) during Wednesday’s trading, reaching 1.04025, as demand for the US dollar as a safe haven decreased following the avoidance of a large-scale trade conflict. Data released from the US last night indicated a slowdown in the growth of service sector activity in January.
During the European trading session, data releases from Germany and the Eurozone have the potential to drive EURUSD movements. If the data mentioned above comes in better than the forecast, EURUSD could benefit from additional positive sentiment.
GBPUSD
GBPUSD rose by 263 points (26.3 pips) to 1.25038 on Wednesday, after peaking at a one-month high of 1.25497. The decline in demand for the US dollar as a safe haven allowed GBPUSD to rally.
However, there is potential for GBPUSD to face pressure during the European session, as the Bank of England (BoE) is set to announce its monetary policy tonight.
USDJPY
USDJPY fell by 1.715 on Wednesday, reaching 152.588. This morning, USDJPY declined further to 151.808, marking the lowest level since mid-December.
The Japanese yen is strengthening after data indicated a significant rise in average wages in Japan. Additionally, officials from the Bank of Japan have suggested that interest rates may be increased again, further boosting the yen and exerting pressure on USDJPY.
Nasdaq
The Nasdaq successfully recorded a gain of 188 index points, reaching 21,769 on Wednesday after an initial dip at the start of trading.
The Nasdaq’s rise was influenced by China’s response to US import tariffs, which did not target all American goods. Furthermore, it was reported that President Trump and Chinese President Xi Jinping are expected to talk in the coming days, raising hopes that a more significant trade conflict can be averted.
This sentiment will continue to influence Nasdaq movements during the European trading session.
