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Global financial markets on May 8, 2025, are energized by speculation of a US-UK trade deal, boosting GBP/USD, while gold holds near $3,400 amid trade uncertainties and geopolitical risks. The Japanese Yen strengthens on safe-haven demand and BoJ rate-hike bets, pressuring USD/JPY. The US Dollar weakens despite the Fed’s hawkish pause, supporting USD/CAD’s decline with rising oil prices. WTI crude rebounds, but trade tensions cap gains. Trump’s trade deal announcement at 14:00 GMT and US Jobless Claims data are key catalysts today.
Current Level: Gold (XAU/USD) trades around $3,400, near a two-week high.
Market Dynamics: Trump’s reluctance to lower China tariffs (145%) and ongoing US-China trade talk uncertainties (Switzerland meeting May 10) boost safe-haven demand. Geopolitical risks (Russia-Ukraine strikes, Israel-Houthi conflict, India-Pakistan tensions) further support gold. A weaker USD (DXY at 99.70) aids gains, despite Fed’s hawkish pause (rates unchanged at 4.25%-4.50%). Trump’s trade deal announcement may shift risk sentiment.
Technical Outlook: Resistance at $3,434-$3,435; support at $3,460. Positive oscillators favor bulls, with a break above $3,435 targeting $3,500.
Current Level: GBP/USD trades near 1.3340, up on trade deal hopes.
Key Drivers: Speculation of a US-UK trade deal (Trump’s announcement at 14:00 GMT) lifts GBP, supported by a weaker USD. The UK’s insulation from US tariffs (10% vs. China’s 145%) and services PMI (53.1) bolster sentiment. BoE’s expected 25 bps cut to 4.25% today may cap gains. Fed’s cautious tone (Powell citing tariff uncertainty) limits USD strength.
Technical Outlook: Resistance at 1.3400; support at 1.3300. RSI above 50 signals bullish momentum, with BoE and Trump’s announcement as catalysts.
Current Level: USD/JPY trades near 143.80, down as JPY strengthens.
Influencing Factors: Safe-haven JPY gains from geopolitical risks and fading US-China trade optimism (Trump denies tariff cuts). BoJ’s March minutes signal 2025 rate hikes, supporting JPY. USD weakens despite Fed’s hawkish pause, with Powell’s wait-and-see stance capping USD gains. Trump’s trade deal may influence risk tone.
Technical View: Support at 143.40; resistance at 144.00. Negative oscillators suggest bearish bias, with a break below 142.35 targeting 141.00.
Current Level: AUD/USD trades around 0.6450, consolidating.
Market Dynamics: China’s PMI slowdown (Caixin Services at 50.7) and US tariffs pressure AUD, but USD weakness and Australia’s trade surplus (AUD 6.9 billion) provide support. RBA rate-cut bets for May persist, while US-UK trade deal optimism lifts risk sentiment. US Jobless Claims and Trump’s announcement are key.
Technical Outlook: Resistance at 0.6515; support at 0.6408. RSI above 50 maintains bullish bias, with FOMC fallout and trade news driving direction.
Current Level: USD/CAD trades near 1.3815, down 0.15%.
Key Drivers: Rising WTI oil prices ($58.10) and hopes for a US-Canada trade deal bolster CAD. USD struggles post-Fed’s cautious outlook, despite unchanged rates. Trump’s tariffs (25% on Canada) and OPEC+ output hike fears cap CAD gains. Canadian jobs report tomorrow is critical.
Technical Outlook: Support at 1.3800; resistance at 1.3850. Bearish momentum grows, with a break below 1.3800 targeting yearly low
Current Level: WTI crude trades at $58.10, recovering losses.
Key Drivers: US crude inventory drawdown (-2.032 million barrels) supports prices, but US-China trade tensions (Trump’s stance) and OPEC+ output hike fears cap gains. Fed’s cautious tone and global demand concerns weigh on sentiment. Brent crude edges up on trade talk hopes.
Technical Outlook: Resistance at $59.00; support at $57.50. RSI neutral, with Trump’s announcement and trade talks as catalysts.
Today’s Data: US Weekly Initial Jobless Claims (expected 220K) will influence USD dynamics. Canadian trade balance may reflect tariff pressures, impacting CAD.
Trump’s Trade Deal: Trump’s 14:00 GMT announcement of a US-UK trade deal could spark risk-on sentiment, boosting GBP/USD and equities (S&P 500 futures +0.6%). Details on tariff reductions (e.g., cars, farm goods) will be key.
BoE Decision: Expected 25 bps rate cut to 4.25% may pressure GBP if dovish, though trade deal optimism may offset losses.
US-China Trade and Geopolitical Risks
Trade Status: US-China talks in Switzerland (May 10) face hurdles as Trump denies tariff reductions (145%), tempering optimism. Bessent calls it an initial step, not a breakthrough. UK deal speculation lifts risk sentiment.
Geopolitical Tensions: Russia-Ukraine strikes, Israel’s Sanaa airport attack, and India-Pakistan clashes fuel safe-haven demand, supporting gold and JPY. Putin’s ceasefire faces skepticism.
Outlook
On May 8, 2025, markets are poised for volatility with Trump’s US-UK trade deal announcement driving GBP/USD and risk sentiment. Gold and JPY benefit from trade uncertainties and geopolitical risks, while USD/CAD and AUD/USD face USD weakness. The BoE’s rate decision and US Jobless Claims will add momentum, with Powell’s cautious Fed stance and ongoing trade/geopolitical developments shaping investor caution.
Stay tuned for further updates.
