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24/01/2025 - 08:19 UTCThe US dollar traded moderately lower against most major currencies on Thursday, with the dollar index (USDX) down by 0.09%, amidst signs that Trump would push the Federal Reserve for immediate rate cuts. In his address to the World Economic Forum in Davos, Trump urged OPEC and other oil-producing nations to lower prices. According to him, this could lead to a swift resolution of the Russia-Ukraine conflict by cutting off financial support to Russia's military efforts.
The yen edged higher against the dollar on Thursday, after the Bank of Japan raised interest rates by 25 basis points as widely expected but forecast higher inflation and slower growth in the coming years. The BOJ also warned that it will raise interest rates further if its economic forecasts were met, aiming to address inflationary pressures while maintaining economic stability.
Wall Street sentiment has improved recently, with major U.S. stock indices consistently gaining ground and the US 500 reaching new record highs daily. Strong support was provided by solid earnings reports as well as Donald Trump's address at Davos in which he said he would demand interest rates be lowered. The remarks come ahead of the Fed meeting next week, with many on Wall Street expecting the central bank to hold rates steady.
In corporate news, American Airlines stock plummeted 8.7% after the airline issued a disappointing first-quarter earnings forecast. The company anticipates an adjusted loss per share of 20 to 40 cents for the first three months of 2025, contrasting sharply with the more optimistic outlooks provided by its competitors. Electronic Arts (EA) shares plunged nearly 17% after the video game publisher lowered its net bookings guidance. This downward adjustment stems from underwhelming performance in its soccer game franchises.
For Friday, the Eurozone, the U.K. and the U.S. will publish figures on Flash Services and Flash Manufacturing PMIs. Some price action could also be observed upon a speech by ECB president Christine Lagarde at the World Economic Forum as well as the release of existing home sales numbers from the U.S., and a survey on consumer sentiment and inflation expectations by the Univesrity of Michigan.
The EUR/USD currency pair held steady on Thursday, trading near the 1.0400 level as market participants navigated a lackluster week. Despite a robust start on Monday, the absence of significant economic data has left the markets in a state of inertia, with political developments dominating the sparse trading activity.
At the World Economic Forum’s (WEF) annual gathering in Davos, Switzerland, US President Donald Trump delivered a polarizing address. He reaffirmed his commitment to eliminating the US budget deficit while simultaneously pushing for what he called “the largest tax cut in American history.” Trump also signaled his intent to pressure the US Federal Reserve to lower interest rates, challenging the Fed’s traditional independence.
Looking ahead, EUR/USD traders are eyeing Friday’s release of Purchasing Managers Index (PMI) data from both the EU and the US.
Gold prices hold steady as market participants process a mix of US economic data and continued rhetoric on trade policy from President Donald Trump.
Despite Thursday's minor pullback, gold is poised to close the week with solid gains, supported by broader market dynamics.
The US Department of Labor reported an uptick in initial jobless claims for the week ending January 18, signaling potential softening in the labor market.
The US economic docket for the remainder of the week includes S&P Global Flash PMIs, housing market updates, and the final release of January’s University of Michigan (UoM) Consumer Sentiment Index.
Oil prices fell by 1% on Thursday after US President Donald Trump urged Saudi Arabia and OPEC to reduce oil prices during his speech at the World Economic Forum (WEF) in Davos, Switzerland.
Trump’s comments stirred uncertainty in the energy markets, as his administration’s proposed tariffs and energy policies continue to raise questions about their impact on global economic growth and energy demand.
The latest report from the Energy Information Administration (EIA) revealed that US crude oil stockpiles have dropped to their lowest level since March 2022. However, the drawdown was smaller than analysts had predicted. Distillate inventories also declined, while gasoline inventories saw an increase.
U.S. main indexes ended the session with gains on Thursday driven by strong corporate earnings and comments from President Donald Trump at the World Economic Forum (WEF) in Davos.
In his virtual address to the WEF, President Trump emphasized his administration’s focus on revitalizing the U.S. economy. He called for immediate global interest rate cuts, asserting that lower rates would support economic growth.
Trump’s remarks reignited investor optimism ahead of next week’s Federal Reserve meeting. While rate cut expectations had diminished following the Fed’s December meeting, slightly cooler inflation data and Trump’s push for cuts have buoyed sentiment.
Investors now turn their attention to upcoming earnings reports from Verizon Communications Inc, American Express Company, and others, which could provide further direction for the markets.
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