The announcement of monetary policies by the Federal Reserve and the Bank of England, along with the trade agreement between the United States and the United Kingdom, triggered significant volatility in the markets last Thursday. This sentiment is expected to continue impacting market movements during the European trading session on Friday (May 9, 2025).
GOLD
Gold prices (XAUUSD) plummeted more than $58 during Thursday’s trading, reaching $3,305.59 per troy ounce. The price had previously surged to around $3,414 per troy ounce before reversing direction.
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The Federal Reserve’s indication that it will not be cutting interest rates in the near future contributed to a negative sentiment towards gold. Additionally, U.S. President Donald Trump announced a trade agreement with the UK, adding further pressure on gold prices.
The appeal of gold as a safe haven diminished due to this agreement, leading to a price decline to $3,274.72 per troy ounce this morning. Following this, gold made a slight recovery to $3,328.28 per troy ounce.
Nevertheless, the previously mentioned factors are expected to continue exerting negative pressure on gold prices.
OIL
The US-UK trade agreement raised hopes for a reduction in trade tensions, resulting in oil prices rising by $2.32 during Thursday’s trading, reaching $60.25 per barrel. The easing of trade tensions is anticipated to bolster the global economy, which could lead to an increase in oil demand.
Oil received additional positive sentiment after data released from China showed an 8.1% year-on-year (YoY) increase in exports for April, significantly better than the forecast of -2% by Trading Central. Although exports from China to the US dropped by 21%, there was an increase in exports to Southeast Asia and Europe.
This growth signals that the Chinese economy remains relatively strong despite the high import tariffs imposed by the US. This lends a positive sentiment towards oil, considering that China is the world’s second-largest oil consumer.
EURUSD
The EURUSD pair fell by 721 points (72.1 pips) to 1.12261 during Thursday’s trading session. The currency pair experienced a sharp decline over two consecutive days, totaling nearly 140 pips and reaching a one-month low.
The strong US dollar, responding to the Federal Reserve’s announcements and the US-UK trade agreement, contributed to the continued drop in the EURUSD rate. This sentiment is likely to persist, affecting the EURUSD movement during the European trading session.
GBPUSD
The GBPUSD pair decreased by 472 points (47.2 pips) to 1.32401 in volatile trading on Thursday. The Bank of England cut the interest rate to 4.25% but did not do so unanimously, with 2 out of 9 members voting to maintain the rate, indicating that further cuts may not occur anytime soon.
This caused the GBPUSD to initially rise, but the strong US dollar subsequently pulled it back down. The US-UK trade agreement seemingly provided a greater positive sentiment towards the US dollar, leaving GBPUSD susceptible to further declines in the European trading session.
USDJPY
The USDJPY pair surged by 2.096 points (209.6 pips) during Thursday’s trading to 145.879, marking the highest level in the last month. This sharp increase indicates strong positive sentiment towards the US dollar stemming from the Federal Reserve’s announcements and the US-UK trade agreement.
This sentiment is expected to influence the USDJPY movements during the upcoming European trading session.
Nasdaq
The Nasdaq index rose by 197 points to 20,154 during Thursday’s trading, even reaching as high as 20,336, the highest level in the past six weeks. The Nasdaq benefited from the positive sentiment arising from the US-UK trade agreement.
This agreement is believed to contribute to an improving US economy, especially with upcoming trade negotiations between the US and China planned for the weekend. The sentiment is likely to further influence Nasdaq movements during the European trading session.
