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14/02/2025 - 08:22 UTCThe dollar declined against most major currencies on Thursday, with the USDX ending the session 0.86% lower despite strong inflation figures released for January, as President Donald Trump indicated that he would not immediately implement retaliatory tariffs on US trading partners, as was previously feared. Trump signed an executive order to explore reciprocal tariffs on major U.S. trading partners, however, the tariffs are only expected to be imposed after April, giving countries more time at the negotiating table with Trump.
Producer prices in the US rose in January, supporting expectations that the Federal Reserve will not cut interest rates in the first half of the year. However, some components of the data suggested that the Fed's preferred inflation measure may be lower than expected.
A weaker dollar helped gold prices rise, even as safe-haven demand lessened somewhat due to signals of potential peace talks regarding the conflict in Ukraine. Gold was on track for a weekly gain of approximately 2.4%, marking its seventh consecutive week of increases, as safe-haven demand persisted amidst uncertainty surrounding potential trade disputes triggered by U.S. tarrifs.
Wall Street's mood was positive on Thursday, with all three main stock indices ending higher, as investors weighed a series of persistent inflation reports against postponement of new US trade tariffs, a surge in major tech stocks and Trump stating that his administration was preparing for peace talks between Russia and Ukraine.Major technology stocks were also supported by falling bond yields with Nvidia and Apple seeing significant gains, while Tesla rebounded strongly from a recent low.
In corporate news, GameStop is reportedly considering investing in Bitcoin and other cryptocurrencies as part of a diversification strategy, according to CNBC sources. The news sent the stock soaring by 7.7% in after-hours trading, though it had earlier jumped as much as 20%, reflecting investor enthusiasm. This potential move comes after GameStop's meteoric rise in 2021 as a meme stock, fueled by retail investors.
Energy based futures saw moderate gains on Thursday, with WTI and Brent contracts gaining by 0.27% and 0.49% resspectively amid relief that U.S. President Donald Trump did not immediately impose reciprocal tariffs as initially threatened.
For Friday, the focus turns to U.S. core retail sales, U.S. import prices, industrial production and a speech by FOMC member Logan.
The EUR/USD saw a strong bid on Thursday, climbing 0.67% to reclaim the 1.0400 level. A weaker US Dollar supported the pair following US Producer Price Index (PPI) inflation data that, while above forecasts, was not as severe as some had feared. Meanwhile, market sentiment was further influenced by ongoing uncertainty surrounding the Trump administration’s tariff policies, with investors increasingly skeptical that a full-scale trade war will materialize.
European economic data met expectations on Thursday, providing little impetus for traders. However, US inflation figures helped ease concerns about rising price pressures.
Looking ahead, US Retail Sales will be the key data release for the remainder of the week.
Gold prices climbed on Thursday, driven by a combination of higher-than-expected US Producer Price Index (PPI) data and escalating tariff concerns.
US President Donald Trump had signed the reciprocal tariff order, stating, “Whatever they charge us, we will charge them.” He further noted that no tariffs would apply to products manufactured in the US and hinted that levies on autos would soon follow, alongside existing steel and aluminum duties.
While the latest PPI report indicated that the disinflation process has stalled, the US labor market remained strong. The Department of Labor reported a decline in weekly unemployment claims, reinforcing confidence in employment conditions.
Oil prices ended Thursday’s session nearly flat, recovering from earlier losses of more than 1% as the U.S. postponed new tariff announcements until at least April. The delay fueled optimism that a trade war—potentially detrimental to global economic growth and energy demand—could be averted.
Prices initially declined on reports of a potential peace deal between Russia and Ukraine, raising concerns that the easing of sanctions on Moscow could increase global energy supplies. However, sentiment shifted after President Donald Trump instructed U.S. commerce and economic officials to evaluate reciprocal tariffs against countries imposing tariffs on American goods.
The US 500 closed higher on Thursday after President Donald Trump signed an order to explore reciprocal tariffs on U.S. trading partners but refrained from immediate implementation. The move reassured investors who had feared swift action on trade restrictions.
Trump’s executive order directs U.S. officials to assess ways to match the tariffs imposed by other countries on American goods. While he had previously hinted at an imminent announcement, market concerns eased as the decision left room for negotiations.
NVIDIA Corporation surged more than 3% after Hewlett Packard Enterprise shipped its first Nvidia AI computing Blackwell system. The development eased concerns on Wall Street about possible delays in the rollout of Nvidia’s latest AI chips due to earlier reported glitches.
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