Morning Market Review for 26.05.2025

EUR/USD

The European currency is showing a noticeable rise in the EUR/USD pair, developing the strong "bullish" momentum formed at the end of last week. The single currency is testing 1.1410 for a breakout, updating local highs from late April. It should also be noted that last week the euro reacted sharply negatively to the latest statements by US President Donald Trump: last week, he noted that “the EU is very difficult to deal with” and that “trade talks are going nowhere”. In this regard, he proposes introducing duties of 50.0% on all imports from the EU. Later, however, the White House agreed to postpone the new tariffs for a month in a telephone conversation with European Commission President Ursula von der Leyen. In addition, the US dollar is weakening amid news surrounding the tax cut bill. Last week, the House of Representatives approved a massive fiscal relief package by the narrowest of margins, and the bill now heads to the Senate, where investors expect several weeks of vigorous debate. Donald Trump's critics point out that the proposed measures could only lead to a sharp increase in the budget deficit and exacerbate the national debt problem, adding nearly 4.0 trillion dollars to it over the next decade. In turn, the European currency received support on Friday, responding to the recovery of the German economy: in the first quarter, Gross Domestic Product (GDP) increased by 0.4% after 0.2% in the previous period, and in annual terms the indicator remained in negative territory, amounting to –0.2% after –0.4%. Today, at 15:20 (GMT+2), investors will be focused on the speech of the President of the European Central Bank (ECB), Christine Lagarde, who may comment on the prospects for further interest rate cuts.

GBP/USD

The British pound is gaining value in the GBP/USD pair, developing a fairly strong upward trend in the ultra-short term. The instrument is testing 1.3585 for a breakout, while market activity remains subdued at the beginning of the new week. The US and UK markets are closed today, so investors are assessing the statistics of the previous week. The pound received noticeable support on Friday after the publication of April Retail Sales data: in annual terms, their volumes added 5.0% after an increase of 2.6% a month earlier with a forecast of 4.5%, and in monthly terms — 1.2% after 0.1% with expectations of 0.2%, while the indicator excluding fuel accelerated from 2.6% to 5.3% and from 0.2% to 1.3%, respectively. Separately, market participants drew attention to the slight increase in the Consumer Confidence index from the analytical portal Gfk Group in May from –23.0 points to –20.0 points, while experts expected –22.0 points. The dollar, in turn, received minor support on Friday, reacting to statistics on New Home Sales, which reflected an improvement in domestic demand and consumer confidence: in April, the dynamics accelerated by 10.9% after an increase of 2.6% in the previous month, and in absolute terms, the number of new buildings sold increased from 0.370 million to 0.743 million, ahead of forecasts of 0.692 million. Tomorrow at 14:30 (GMT+2), the market will receive April data on the dynamics of Durable Goods Orders: analysts expect a noticeable decrease in the dynamics by 8.0% after an increase of 9.2% in the previous period.

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Publication date:

26 May 2025 - 12:20 (GMT)

The New Zealand dollar is gaining in value in the NZD/USD pair, building on the strong "bullish" momentum that formed on Friday. The instrument is testing 0.6015, while the American currency remains under pressure from the news background. Earlier, markets reacted to statements by US President Donald Trump about his readiness to introduce higher import duties against the EU as early as June 1, which could worsen the already difficult situation in trade relations. Later, however, the White House agreed to postpone the new tariffs for a month in a telephone conversation with European Commission President Ursula von der Leyen. In addition, the US dollar is weakening amid news surrounding the tax cut bill. The House of Representatives approved massive fiscal relief by the narrowest of margins last week, and the bill now heads to the Senate, where investors expect weeks of vigorous debate. Donald Trump's critics point out that the proposed measures could only lead to a sharp increase in the budget deficit and exacerbate the national debt problem, adding nearly 4.0 trillion dollars to it over the next decade. Some support for the New Zealand dollar, in turn, was provided by macroeconomic statistics on the dynamics of Retail Sales, which appeared on Friday: in the first quarter, their volumes slowed from 1.0% to 0.8%, with expectations of –0.1%, and Sales excluding Cars decreased from 1.4% to 0.4%. Meanwhile, the Reserve Bank of New Zealand is expected to adjust its key interest rate from 3.50% to 3.25% at its meeting on Wednesday at 04:00 (GMT+2). The easing of monetary policy is associated with the stabilization of inflation in the target range of 1.0-3.0%.

The US dollar is gaining in USD/JPY, trying to recover from last Friday’s sharp decline, when it came under renewed pressure after President Donald Trump proposed a 50.0% tariff on EU goods, saying that “the EU is very difficult to deal with” and that “trade talks are not going anywhere”. However, the White House later agreed to postpone the new tariffs for a month in a phone call with European Commission President Ursula von der Leyen. Meanwhile, macroeconomic data from Japan released last Friday provided modest support to the yen, with the National Consumer Price Index rising 3.6% in April, mirroring the previous month, while the CPI excluding Food and Energy accelerated to 3.0% from 2.9% and the CPI excluding Fresh Food — to 3.5% from 3.2%. In turn, the data presented today turned out to be ambiguous: the index of Leading Economic Index in March showed an increase from 107.7 points to 108.1 points, and the Coincident Index fell from 116.0 points to 115.9 points. Tomorrow, at 14:30 (GMT+2), the market will receive April data on the dynamics of Durable Goods Orders in the US: analysts expect a noticeable reduction in the dynamics by 8.0% after growth by 9.2% in the previous period.

The XAU/USD pair is trading flat, holding near 3350.00 and local highs from May 8. Market activity remains subdued, as US markets are closed today on the occasion of Memorial Day. At the same time, market participants are analyzing the news of the past week. In particular, the markets paid attention to the latest statements by US President Donald Trump: last week, he noted that “it is very difficult to do business with the EU” and that “trade negotiations are leading nowhere”. In this regard, he proposes to introduce duties of 50.0% on all imports from the EU. Later, however, the White House agreed to postpone the new tariffs for a month, holding telephone talks with the head of the European Commission Ursula von der Leyen. In addition, the US dollar is weakening amid news around the tax cut bill. Recall that last week, the House of Representatives approved large-scale fiscal relief with a minimal majority of votes, and now the bill will be sent to the Senate, where investors expect several weeks of active debate. Donald Trump's critics point out that the proposed measures could only lead to a sharp increase in the budget deficit and exacerbate the national debt problem, adding almost 4.0 trillion dollars to it over the next decade. Meanwhile, some support for the American currency was provided by data on the dynamics of New Home Sales published on Friday: in April, the dynamics accelerated by 10.9% after an increase of 2.6% in the previous month, and in absolute terms, the number of new homes sold increased from 0.370 million to 0.743 million, ahead of forecasts of 0.692 million. Tomorrow, at 14:30 (GMT+2), the market will receive April data on the dynamics of Durable Goods Orders: analysts expect a noticeable reduction in the dynamics by 8.0% after growth by 9.2% in the previous period.