📊 Australian dollar strengthens despite weak GDP

The Australian dollar (AUD) gained 0.51% on Tuesday as a weaker U.S. dollar (USD) helped offset disappointing domestic Gross Domestic Product (GDP) figures.

👉 Possible effects for traders

Australia's economy expanded by just 0.2% quarter-on-quarter in Q1 2025, marking the slowest growth in three quarters and falling short of the 0.4% forecast. On an annual basis, GDP rose by 1.3%, below the expected 1.5%. Weaker-than-expected figures strengthened expectations of further monetary easing by the Reserve Bank of Australia. Futures pricing now indicates an 80% probability of an additional rate cut at the July meeting.

Adding to market uncertainty, U.S. President Donald Trump's latest tariffs on steel and aluminium officially take effect on 4 June, exacerbating tensions with key trading partners. Relations between Washington and Beijing remain fragile, with both sides accusing each other of breaching the terms of their recent trade agreement. Investors are now closely watching for a potential meeting between Trump and Chinese President Xi Jinping later this week, which could lead to either a diplomatic resolution or a further escalation.

AUDUSD fell during Asian and early European trading hours. Today, the main focus is on two U.S. macroeconomic reports: ADP Employment at 12:15 p.m. UTC and ISM Services Purchasing Managers' Index (PMI) at 2:00 p.m. UTC. A higher-than-expected number will pressure AUDUSD lower, while softer data may support the pair.

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📊 Softer-than-expected inflation data pressures euro

The euro (EUR) fell by 0.64% against the U.S. dollar (USD) on Tuesday after eurozone inflation came in slightly below expectations.

👉 Possible effects for traders

A report showed that eurozone consumer prices rose by 1.9% year-over-year in May, falling just under the 2% market forecast. Weaker-than-expected data heightened expectations that the European Central Bank (ECB) will deliver a 25-basis-point rate cut later this week. With inflation now below the ECB's target and signs of a cooling economy, markets view this move as a final cut before the central bank pauses its easing cycle to reassess incoming economic data.

At the global level, the Organization for Economic Cooperation and Development (OECD) revised its global economic outlook, projecting GDP growth to slow from 3.3% in 2024 towards 2.9% in 2025 and 2026. The downgrade reflects growing concerns over escalating trade tensions, which the OECD warns could further undermine business investment, distort supply chains, and fuel inflationary pressures. All these challenges may complicate the path forward for both monetary and fiscal policymakers worldwide.

EURUSD remained unchanged during Asian and early European trading sessions. Today, the main focus is on the U.S. macroeconomic reports: ADP Employment at 12:15 p.m. UTC and ISM Services Purchasing Managers' Index (PMI) at 2:00 p.m. UTC. Stronger-than-expected figures may provoke a downward correction in EURUSD. Conversely, weaker-than-expected results may lift the pair towards 1.14500.

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📊 Gold pulls back as U.S. dollar strengthens

The gold price (XAU) fell by 0.83% on Tuesday, retreating from a nearly four-week high as the U.S. dollar (USD) strengthened.

👉 Possible effects for traders

'It's hard to know what's really driving things today', said Chuck Carlson, CEO of Horizon Investment Services in Hammond, Indiana. 'There seems to be a little bit more comfort that the economy is not going into recession, and there might be a bit of front-running here in the sense we have a jobs report that’s going to be coming out, and investors want to get on the right side of that before it’s released'.

Meanwhile, the Organization for Economic Cooperation and Development (OECD) sharply downgraded its global growth outlook, warning that the world economy is likely to slow more deeply than previously expected. The OECD cited escalating protectionist policies—particularly the ongoing U.S.–China trade war—as key risks. It noted that rising tariffs are fuelling inflationary pressures, disrupting global supply chains, and undermining business confidence. The organisation emphasised that if trade tensions continue to escalate, the global economy could slow down further heading into 2026.

XAUUSD rose during the Asian session but lost most of its gains during the early European trading hours. Markets now turn their attention to the ADP U.S. Employment Report, due at 12:15 p.m. UTC today. As a widely watched proxy for nonfarm payroll data, the release may trigger volatility across all USD-related pairs.

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📊 Japanese yen rises as investors flee from U.S. dollar

The Japanese yen (JPY) held steady at around 142.900 on Wednesday, supported by a weaker U.S. dollar (USD) following disappointing U.S. economic data.

👉 Possible effects for traders

Signs of a sharp slowdown in private-sector hiring and an unexpected contraction in the U.S. services sector have heightened fears that trade policy uncertainty is starting to weigh on broader economic activity. Weak U.S. data fuelled risk-off sentiment, boosting demand for the yen—a traditional safe-haven asset during periods of global uncertainty.

Domestically, Japan’s economic outlook remains fragile. April marked the fourth consecutive month of real wage declines as inflation outpaced income growth. This persistent erosion in household purchasing power raises concerns about domestic demand and complicates the Bank of Japan’s (BoJ) path to policy normalisation. Still, BoJ Governor Kazuo Ueda reiterated that the central bank is ready to raise interest rates if inflation and economic projections are met, indicating a cautious but deliberate shift toward tightening amid a challenging global backdrop.

USDJPY edged higher during Asian and early European trading sessions. In addition to tariff-related news, traders should focus on the U.S. Jobless Claims report at 12:30 p.m. UTC. USDJPY traders should watch the critically important levels: resistance at 144.500 and support at 142.500.

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📊 Disappointing U.S. economic indicators supported euro

The euro (EUR) gained 0.42% against the U.S. dollar (USD) on Wednesday following weak U.S. economic reports.

👉 Possible effects for traders

The ADP Employment report surprised to the downside, showing just 37,000 private-sector jobs added in May—the lowest in over two years. The report raised concerns about slowing momentum in the U.S. labour market. At the same time, the ISM Services Purchasing Managers' Index data revealed a contraction in May for the first time in nearly a year. The contraction was driven by a sharp pullback in new business and rising input costs, which U.S. President Donald Trump's recent tariff hikes may have exacerbated.

These developments have intensified speculation about potential monetary policy easing, aligning with Trump's ongoing calls for rate cuts. However, Federal Reserve (Fed) officials have so far maintained a cautious tone, citing ongoing trade and inflation risks. Markets are now focused on weekly Jobless Claims and nonfarm payrolls reports, which could be pivotal in shaping the U.S. monetary policy.

EURUSD remained relatively flat during Asian and early European trading sessions. Today, the U.S. Jobless Claims at 12:30 p.m. UTC may provide fresh insight into labour market conditions, possibly altering Fed monetary policy expectations. Traders should also monitor any tariff-related news and developments around trade negotiations. Key EURUSD levels: support at 1.13600 and resistance at 1.14400.

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📊 Soft U.S. economic data boosted gold

The gold price (XAU) rose by 0.56% on Wednesday following the weaker-than-expected ADP U.S. Employment report.

👉 Possible effects for traders

Recent data revealed a surprising contraction in the U.S. services sector—the first decline in nearly a year. Meanwhile, ADP figures showed the slowest private sector job growth since March 2023. These signs of economic weakness have strengthened expectations that the Federal Reserve (Fed) will cut rates at least twice in 2025, a scenario that supports non-yielding assets such as gold. Despite growing market pressure and demands from U.S. President Donald Trump to lower interest rates, Fed officials have so far maintained a cautious stance. They emphasised the need for more clarity amid persistent economic and geopolitical uncertainties.

Trade tensions continue to loom large over the outlook. Markets remain cautious following President Trump's decision to double tariffs on steel and aluminium imports. Trump's increasingly combative rhetoric—especially toward Chinese President Xi Jinping—has heightened fears of a renewed trade war. These developments, combined with weak U.S. economic data, have shifted market focus to Friday's U.S. nonfarm payrolls report, now seen as a potential turning point for the Fed’s policy stance.

XAUUSD slightly rose during Asian and early European trading sessions. Today, U.S. Jobless Claims at 12:30 p.m. UTC could shed light on the state of the U.S. labour market, potentially altering U.S. monetary policy expectations. Traders should also monitor trade tariff news and negotiation developments. Key levels to watch for XAUUSD are support at $3,340 and resistance at $3,395.

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📊 Gold consolidates ahead of NFP report

The gold price (XAU) fell by 0.57% on Thursday following the weaker-than-expected U.S. Jobless Claims report.

👉 Possible effects for traders

A rise in U.S. jobless claims and a sharp drop in imports have heightened concerns about slowing economic growth, reinforcing investor uncertainty. The economic data point to weakening domestic demand and a softening labour market—conditions that usually lead to reduced consumer activity and lower business investment, weighing on GDP growth.

Meanwhile, gold prices edged lower as geopolitical tensions eased, following reports of constructive dialogue between U.S. President Donald Trump and Chinese President Xi Jinping. Sentiment improved on hopes that both sides might soon resume trade talks. However, traders remained cautious ahead of the upcoming U.S. nonfarm payroll (NFP) report, which could significantly influence the Federal Reserve's (Fed) policy outlook and market direction.

XAUUSD fell slightly during Asian and early European trading sessions. The key event today is the NFP report, due at 12:30 p.m. UTC. The market expects payrolls to increase by 130,000 in May, marking the smallest gain in three months and a decrease from April's 177,000. A stronger-than-expected NFP report may cause XAUUSD to retreat slightly, while weaker data could lift gold.

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