The recent announcements regarding monetary policies from The Fed, the Bank of Japan (BoJ), and the Bank of England (BoE) have led to continued high volatility in the financial markets, a trend noted during trading on Thursday. This heightened volatility is likely to persist into trading on Friday (December 20, 2024).
This is influenced by the release of various economic data from the US, as well as inflation figures from the United States based on Personal Consumption Expenditures (PCE), which could significantly affect market movements.
GOLD
Gold prices (XAUUSD) closed Thursday’s trading at $2,594.02 per troy ounce, marking an increase of $8.48. Earlier, Gold had risen to $2,626.34 per troy ounce before this was trimmed following data releases from the United States.
The growth in the US economy for the third quarter of 2024 was revised upward, jobless claims were lower than forecast, and existing home sales exceeded expectations. This data strengthens the Fed’s projections of not aggressively lowering interest rates next year, leading to negative sentiment for Gold.
The negative sentiment is expected to weigh on trading during the European session. Furthermore, if economic data from Europe is released worse than forecasted, there is potential for the US dollar to strengthen even further, putting additional pressure on Gold.
OIL
Oil prices experienced a decrease for four consecutive days, closing Thursday at $69.21 per barrel. Central banks in several countries are adopting a cautious stance on interest rate cuts for the upcoming year.
This cautious outlook diminishes global economic prospects, contributing to negative sentiment towards Oil, as there may be limited demand. This negativity is likely to influence Oil trading during the European session.
ユーロ/米ドル
EURUSD saw a sharp rise during Thursday’s trading before being trimmed back towards its lowest levels in nearly two years. This movement indicates continued weakness in the EURUSD, as the European Central Bank (ECB) may be more aggressive in reducing interest rates than The Fed next year.
Today’s European session will see the release of Germany’s Producer Price Index (PPI) at 14:00 WIB. Trading Central forecasts a November PPI of -0.3% year-on-year (YoY), compared to the previous month at -1.1% YoY.
Although the PPI shows improvement, the negative figure will still exert pressure on EURUSD.
GBPUSD
GBPUSD exhibited significant volatility during Thursday’s trading, closing at 1.24986. Compared to Wednesday’s close, GBPUSD fell by 732 points (73.2 pips). The decline occurred even as the BoE maintained its benchmark interest rate at 4.75%.
The pressure on GBPUSD came from three out of nine members of the monetary policy voting committee opting to lower interest rates and reducing economic growth forecasts. This could signal a more aggressive stance on rate cuts from the BoE compared to The Fed in the upcoming year.
UK retail sales data at 14:00 WIB could add further pressure to GBPUSD if released below the Trading Central forecast of 1.9% YoY for November, which is lower than the previous month’s growth of 2.4% YoY.
米ドル円
This currency pair surged over 250 pips to 157.411 during Thursday’s trading, reaching its highest level in the past five months. The monetary policy announcements from The Fed and BoJ were significant triggers for the large movement in USDJPY.
The strength of the US dollar responding to The Fed’s policy contrasts with the pressure on the yen, which remains under pressure after the BoJ kept interest rates unchanged and has not yet provided signals about when rates might be increased.
These policies are likely to continue providing positive sentiment for USDJPY during the European session.
ナスダック
Sell pressure following the Fed’s monetary policy announcement continues to loom over the Nasdaq. Yesterday, the Nasdaq dropped by 52 index points and saw a further decline of 204 index points, settling at 21,203 by the afternoon.
Economic data showcasing a strong US economy bolsters expectations that the Fed will not be aggressive in cutting interest rates next year, leading to ongoing pressure on the Nasdaq.
