Morning Market Review for 27.05.2025

EUR/USD

The European currency shows a flat trend in the EUR/USD pair, consolidating near 1.1390. Investors are expecting new drivers to emerge after a fairly calm start to trading this week, during which, nevertheless, the euro managed to update the local highs of April 29, receiving support from optimistic news about trade relations between the US and the EU. At the end of last week, US President Donald Trump announced import duties on EU goods in the amount of 50.0%, noting that negotiations with official Brussels "are not leading to any results". The tariffs were originally expected to come into effect on June 1, but this Sunday it became known that the decision to introduce new restrictions would be postponed for about a month. This became possible after a telephone conversation between Trump and the President of the European Commission, Ursula von der Leyen. In addition, investors are watching President Donald Trump's initiative to extend tax breaks. The bill passed the House of Representatives by a narrow margin and will now go to the Senate, where analysts expect intense debate for weeks. Trump himself also noted that many of the spending and tax cuts in the bill would undergo significant changes in the Senate. The focus of European investors today, at 11:00 (GMT+2), will be on the May data on the dynamics of business sentiment in the EU: forecasts suggest that the Economic Sentiment index will rise from 93.6 points to 94.0 points, the Industrial Confidence index will rise from –11.2 points to –11.0 points, and the overall level of Consumer Confidence may be fixed at –15.2 points. In turn, in the US, at 14:30 (GMT+2), the April statistics on Durable Goods Orders will be released to the market: analysts expect Durable Goods Orders to fall 8.0% after rising 9.2% the previous month, while the Durable Goods Orders excluding Transportation figure will remain flat.

GBP/USD

The British pound is gaining value in the GBP/USD pair, developing a "bullish" trend in the ultra-short term, which has already led to a renewal of the local highs of February 2022. Trading activity remained fairly muted at the start of the week as UK and US markets were closed. At the same time, the pound was supported by strong April data on Retail Sales, which in annual terms added 5.0% after increasing by 2.6% in the previous month, while analysts expected 4.5%, and in monthly terms increased from 0.1% to 1.2% with expectations of 0.2%. The indicator excluding fuel accelerated from 2.6% to 5.3% and from 0.2% to 1.3%, respectively. Today, investors are focusing on the May BRC Shop Price Index data, which showed the indicator was fixed at –0.1%. In turn, in the US, at 14:30 (GMT+2), the April statistics on Durable Goods Orders will be released to the market: analysts expect Durable Goods Orders to fall 8.0% after rising 9.2% the previous month, while the Durable Goods Orders excluding Transportation figure will remain flat. On Thursday, at 21:00 (GMT+2), the Governor of the Bank of England Andrew Bailey will speak and may comment on the further prospects for the regulator to cut the interest rate.

AUD/USD

The Australian dollar is showing mixed dynamics in the AUD/USD pair, consolidating near 0.6480. Activity on the market remains quite low, as there were practically no new drivers of movement at the beginning of the week. With US trading floors closed yesterday for Memorial Day, investors were assessing the latest changes to the White House's trade policy, which has been a source of considerable uncertainty in recent days. At the end of last week, US President Donald Trump announced import duties on EU goods in the amount of 50.0%, noting that negotiations with official Brussels "are not leading to any results". The tariffs were originally expected to come into effect on June 1, but this Sunday it became known that the decision to introduce new restrictions would be postponed for about a month. This became possible after a telephone conversation between Trump and the President of the European Commission, Ursula von der Leyen. In addition, investors are watching President Donald Trump's initiative to extend tax breaks. The bill passed the House of Representatives by a narrow margin and will now go to the Senate, where analysts expect intense debate for weeks. Trump himself also noted that many of the spending and tax cuts in the bill would undergo significant changes in the Senate. Australia will release April inflation data on Wednesday, at 03:30 (GMT+2): the weighted average Consumer Price Index is forecast to slow slightly from 2.4% to 2.3%, creating additional pressure for further monetary easing by the Reserve Bank of Australia (RBA). Last week, the regulator cut its interest rate by 25 basis points to 3.85%, and its Governor, Michele Bullock, said officials were prepared to take further decisive action if inflation gained momentum again, but the current outlook remains uncertain.

USD/JPY

The US dollar is losing value in the USD/JPY pair, holding near 142.40. The day before, the American currency managed to show a slight increase, which allowed the instrument to retreat from the new local lows of April 30. At the same time, there were few drivers for upward price dynamics at the beginning of the week, since the US markets were closed for Memorial Day. Monday's macroeconomic statistics from Japan turned out to be ambiguous: the Leading Economic Index rose in March from 107.7 points to 108.1 points, while the Coincident Index adjusted from 116.0 points to 115.9 points. Today, at 14:30 (GMT+2), the US will release April Durable Goods Orders statistics: analysts expect Durable Goods Orders to fall 8.0% after rising 9.2% the previous month, while the Durable Goods Orders excluding Transportation figure will remain flat. In Japan, data on inflation in the Tokyo region will be released at 01:30 (GMT+2) on Friday, and data on Retail Sales and Industrial Production will be released at 01:50 (GMT+2). The May CPI excluding Fresh Food is forecast to accelerate to 3.5% from 3.4%, adding further support for further monetary tightening by the Bank of Japan. Meanwhile, industrial Production is expected to contract 1.4% in April after rising 0.2% in the previous month, while Retail Sales are expected to rise 3.1%.

XAU/USD

The XAU/USD pair is trading mixed, consolidating near 3340.00. With US trading floors closed yesterday for Memorial Day, investors were assessing the latest changes to the White House's trade policy, which has been a source of considerable uncertainty in recent days. At the end of last week, US President Donald Trump announced import duties on EU goods in the amount of 50.0%, noting that negotiations with official Brussels "are not leading to any results". The tariffs were originally expected to come into effect on June 1, but this Sunday it became known that the decision to introduce new restrictions would be postponed for about a month. This became possible after a telephone conversation between Trump and the President of the European Commission, Ursula von der Leyen. In addition, investors are watching President Donald Trump's initiative to extend tax breaks. The bill passed the House of Representatives by a narrow margin and will now go to the Senate, where analysts expect intense debate for weeks. Trump himself also noted that many of the spending and tax cuts in the bill would undergo significant changes in the Senate. Today, at 14:30 (GMT+2), the US will release April Durable Goods Orders statistics: analysts expect Durable Goods Orders to fall 8.0% after rising 9.2% the previous month, while the Durable Goods Orders excluding Transportation figure will remain flat. Tomorrow, at 20:00 (GMT+2), the minutes of the meeting of the Federal Open Market Committee (FOMC) will be published, which may clarify the prospects for a possible reduction in the cost of borrowing in the second half of 2025. Now, analysts are counting on two or three interest rate adjustments of 25 basis points each, but much will depend on the development of US trade relations with partners.

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