Morning Market Review for 28.05.2025

EUR/USD

The European currency is losing value in the EUR/USD pair, continuing the development of the correction impetus that was formed at the beginning of the current week, when quotes retreated from the local highs of April 29. The instrument is testing 1.1300 for a breakdown, while investors are expecting new drivers for the movement of quotes. Today, at 20:00 (GMT+2), the minutes of the US Federal Reserve meeting for May 7 will be published: analysts expect new signals in favor of reducing the cost of borrowing, given the growing pressure on the regulator from President Donald Trump. Moreover, the initial forecasts already assumed changes in the interest rate at the beginning of the second half of 2025. Also, at 10:00 (GMT+2), there will be a speech by US Federal Reserve representative Neel Kashkari. Tomorrow, at 14:30 (GMT+2), the US will release revised data on Gross Domestic Product (GDP) for the first quarter, as well as statistics on jobless claims: experts expect the new GDP estimate to remain unchanged from the previous level of –0.3%, as will the Core Personal Consumption Expenditure Price Index, which, according to preliminary estimates, will be fixed at 3.5%, and the broader indicator at 3.6%. Initial Jobless Claims for the week ending May 23 may be adjusted from 227.0 thousand to 230.0 thousand, and Continuing ones — from 1.903 million to 1.900 million. European investors, in turn, are analyzing the May statistics on the business climate in the eurozone, published the day before: Industrial Confidence rose from –11.0 points to –10.3 points, Economic Sentiment Indicator — from 93.6 points to 94.8 points with expectations of 94.0 points, the Business Climate indicator — from –0.66 points to –0.55 points, and the level of Consumer Confidence was fixed at –15.2 points.

GBP/USD

The British pound is losing value in the GBP/USD pair during the morning session, developing a weak corrective impetus formed the day before. The instrument is testing 1.3475 for a breakdown, while the US dollar is supported by improving global trade prospects. At the end of last week, President Donald Trump announced the introduction of tariffs against the EU in the amount of 50.0% starting June 1. Later, however, the deadline was moved to July 9 to give the parties time to work out a preliminary trade agreement. Earlier, the US managed to sign an agreement with Great Britain, but this did not completely free official London from duties. The US macroeconomic statistics released yesterday were mixed: Durable Goods Orders fell 6.3% in April after rising 7.6% the previous month, compared with analysts' expectations for –7.9%, while Durable Goods Orders excluding Transportation rose 0.2%, beating expectations for –0.1%. Today, at 20:00 (GMT+2), the market will focus on the minutes of the US Federal Reserve meeting from May 7, at which the interest rate was kept at 4.25%, but officials allowed for its adjustment in the future. In the UK, investors will turn their attention to a speech by Bank of England Governor Andrew Bailey on Thursday, at 21:00 (GMT+2).

NZD/USD

The New Zealand dollar shows mixed dynamics in the NZD/USD pair, consolidating near the opening level 0.5945. At the same time, activity on the market on Wednesday morning remains quite high, which is associated with the publication of the Reserve Bank of New Zealand's (RBNZ) decision on the interest rate: as expected, the value was reduced by 25 basis points to 3.25%. In the follow-up statement, officials noted the increasing tension in the global economy. This is the sixth time the RBNZ has cut borrowing costs since it began its monetary easing cycle in mid-2024. The main driver for the implementation of the "dovish" policy remains the relatively low inflation, which is within the target range of 1.0–3.0%. At the same time, investors and the regulator itself expect another increase in the Consumer Price Index in 2025 to approximately 2.7%. Official data show New Zealand's annual inflation rose to 2.5% in the first quarter. The RBNZ also slightly adjusted its forecasts for the interest rate, and now expects it to fall to 2.90% by the end of this year. Meanwhile, the American currency is receiving moderate support from the latest news about the postponement of tariffs against the EU: late last week, President Donald Trump announced the introduction of tariffs on EU imports of 50.0% on June 1, and again noted that "negotiations are leading nowhere". Later, after a telephone conversation with the President of the European Commission, Ursula von der Leyen, the head of the White House moved the date for the new duties to come into force to July 9. The macroeconomic statistics published yesterday turned out to be mixed: Durable Goods Orders fell 6.3% in April after rising 7.6% the previous month, compared with analysts' expectations for –7.9%, while Durable Goods Orders excluding Transportation rose 0.2%, beating expectations for –0.1%. Today, at 20:00 (GMT+2), the market will focus on the minutes of the US Federal Reserve meeting from May 7, at which the interest rate was kept at 4.25%, but officials allowed for its adjustment in the future.

USD/JPY

The US dollar is gaining value in the USD/JPY pair, developing the "bullish" momentum that formed at the beginning of the week and sharply strengthened in trading the day before. Quotes are testing 144.40 for a breakout, and traders are expecting new drivers to emerge. Today, at 20:00 (GMT+2), the minutes of the US Federal Reserve meeting for May 7 will be published: analysts expect new signals in favor of reducing the cost of borrowing, given the growing pressure on the regulator from President Donald Trump. Moreover, the initial forecasts already assumed changes in the interest rate at the beginning of the second half of 2025. Also, at 10:00 (GMT+2), there will be a speech by US Federal Reserve representative Neel Kashkari. Tomorrow, at 14:30 (GMT+2), the US will release revised data on Gross Domestic Product (GDP) for the first quarter, as well as statistics on jobless claims: experts expect the new GDP estimate to remain unchanged from the previous level of –0.3%, as will the Core Personal Consumption Expenditure Price Index, which, according to preliminary estimates, will be fixed at 3.5%, and the broader indicator at 3.6%. Initial Jobless Claims for the week ending May 23 may be adjusted from 227.0 thousand to 230.0 thousand, and Continuing ones — from 1.903 million to 1.900 million. In turn, on Friday, at 01:30 (GMT+2), Japan will publish May inflation statistics in the Tokyo region: markets are pricing in a modest pickup in the Consumer Price Index excluding Fresh Food from 3.4% to 3.5%, which could signal further interest rate hikes from the Bank of Japan. Also, at 01:50 (GMT+2), investors will turn their attention to April data on Industrial Production and Retail Sales: production in April may contract by 1.4% after growing by 0.2% a month earlier.

XAU/USD

The XAU/USD pair is showing mixed dynamics during the morning session, consolidating near 3300.00 and holding close to minor local lows from May 22. Pressure on gold prices is being exerted by the fact that demand for risky assets has somewhat recovered after US President Donald Trump decided to postpone the introduction of 50.0% tariffs on EU goods, which he announced at the end of last week: they will now come into effect on July 9, along with other postponed measures. Markets are hoping that by that time the parties will be able to conclude at least a preliminary trade agreement that will lead to a revision and easing of tariffs. In addition, analysts are closely monitoring the US tax cut bill, which, in particular, provides for the extension of existing benefits, many of which were initiated during Trump's first term. Trump's critics, in turn, point to the fact that the bill could only increase the US budget deficit and lead to an increase in the national debt by almost 4.0 trillion dollars over the next decade. The macroeconomic statistics published yesterday turned out to be mixed: Durable Goods Orders fell 6.3% in April after rising 7.6% the previous month, compared with analysts' expectations for –7.9%, while Durable Goods Orders excluding Transportation rose 0.2%, beating expectations for –0.1%. Today, at 20:00 (GMT+2), the market will focus on the minutes of the US Federal Reserve meeting from May 7, at which the interest rate was kept at 4.25%, but officials allowed for its adjustment in the future.

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