Gold Hits Four-Week Low
Gold ( XAU/USD ) dropped by over 2.23% on Wednesday as easing global trade tensions reduced demand for safe-haven assets.
The decline—the fourth in six trading sessions—reflects a shift in investors’ interest toward riskier assets after the US reached trade agreements with the U.K. and China. Demand for safe-haven assets is also weakening due to easing geopolitical tensions. Ukraine and Russia are preparing for ceasefire talks on Thursday, and the conflict between India and Pakistan concluded with a ceasefire agreement over the weekend.
"A ceasefire between Pakistan and India, as well as intense focus on a Russia-Ukraine solution, also helped lower the geopolitical temperature, reducing the need for safe havens", wrote Ole Hansen, the Head of Commodity Strategy at Saxo Bank.
XAU/USD continued to decline during the Asian and early European trading sessions, hitting a four-week low below $3,149. Today, the US will release two macroeconomic reports: Jobless Claims and Producer Price Index data at 12:30 p.m. UTC. The data may add extra volatility to the market and influence the Federal Reserve’s monetary policy stance, impacting both the US dollar and gold. Key levels to watch are resistance at $3,195 and support at $3,140.
Euro Rises Amid Trade Policy Uncertainty
On Wednesday, the euro ( EUR/USD ) briefly touched an intraday high of 1.12661 but later retreated and closed 0.11% lower. The decline was due to investors looking for new indications that global trade tensions would continue to subside.
The US Dollar Index surged over 1% on Monday, reaching a one-month high, after the United States and China agreed to temporarily lower mutual tariffs — easing concerns that a prolonged trade war between the world’s two largest economies could trigger a global recession.
The US Dollar Index (DXY) surged by over 1% on Monday and reached a one-month high. The index strengthened after the US and China agreed to temporarily lower mutual tariffs, easing concerns that a trade war between the world’s two largest economies could trigger a global recession.
"Obviously, everything’s still pretty focused on trade these days, that’s still kind of a big catalyst moving things around", said Brad Bechtel, global head of FX at Jefferies in Global Head of FX at Jefferies in New York. "There’s a lot of volatility in the Asian currency space still, but the dollar should still be in a counter-trend bounce and then will ultimately start to turn lower again, potentially on some sort of backdoor or behind-closed-doors arrangement".
EUR/USD rose slightly during the Asian and early European trading sessions. Today, euro traders should focus on news about global trade tariffs and the peace talks between Russia and Ukraine. Additionally, the US Retail Sales report, due at 12:30 p.m. UTC, may add volatility to all USD pairs. Higher-than-expected figures may push EUR/USD down towards 1.11660. Conversely, lower-than-expected results could lift the pair back towards 1.12680.
Australian Dollar Rebounds After Strong Jobs Report
During Wednesday’s volatile trading session, the Australian dollar ( AUD/USD ) lost 0.66% against the US dollar (USD).
"After the optimism of the past couple of days, the market is back to being very sceptical and fearful, perhaps of the uncertainties that are ahead", said Rabobank’s Head of FX Strategy Jane Foley. "We have certainly seen the US dollar behaving as a risky currency" since the tariff announcement on 2 April, she said.
The Australian unemployment rate remains steady at 4.1%, aligning with expectations. The robust employment figures have prompted markets to reassess the likelihood of aggressive monetary easing. The Reserve Bank of Australia (RBA) is anticipated to deliver a 25-basis-point rate cut at its upcoming meeting. Still, traders have moderated expectations for further rate reductions, reflecting confidence in the labour market’s resilience and the potential for inflationary pressures to persist.
The Australian dollar rebounded towards 0.64400 during Asian and early European trading hours, recovering some of the losses from the previous session. The uptick followed the release of stronger-than-expected labour market data, which reinforced a more hawkish sentiment around the RBA policy outlook. The data showed the economy added 89,000 net new jobs in April—significantly surpassing the consensus forecast of 20,000—and pushing total employment to a record high of 14.64 million.
Today, traders should watch for the US macroeconomic data: the US Retail Sales report will come out at 1:30 p.m. UTC and may affect AUD/USD. Higher-than-expected data may push the pair downward towards 0.63500, while softer data may support AUD/USD.