Oil Struggles While Metals Rebound, Dollar Remains Under Pressure

Good morning, traders, and welcome to Friday’s European session. Markets are coming off an eventful Thursday, with a mix of economic data, geopolitical developments, and risk sentiment shifts shaping the trading landscape. The European and U.S. stock markets extended their gains, as investors continued to react positively to Trump’s peace plan discussions and digest fresh macroeconomic data.

One of Thursday’s key highlights was the UK GDP report, which came in stronger than expected, reinforcing the resilience of the British economy. Meanwhile, Swiss inflation remained at -0.1%, in line with expectations, while in the U.S., Producer Price Index (PPI) inflation came in higher than forecasted. Despite the upbeat inflation data, the U.S. dollar remained weak, as markets seem to be shrugging off stronger inflation prints in favor of broader risk-on sentiment.

In the currency market, the yen, Swiss franc, and U.S. dollar continued to weaken, reinforcing the idea that safe-haven assets are under pressure. Meanwhile, European currencies, including the euro and British pound, remained strong, along with emerging market currencies in Europe. The Australian and New Zealand dollars also held firm, benefiting from improved risk appetite.

On the commodities front, oil continues to struggle after giving back its recent short-term gains, now trading near mid-term lows. Selling pressure remains high, and traders are watching closely for further downside potential. Metals, however, staged a strong reversal yesterday, with gold and silver bouncing back after an initial drop. Silver, in particular, remains the best-performing metal of 2025, having gained 16% year-to-date.

As we move into Friday’s trading session, the focus shifts to U.S. retail sales data, which is expected to come in at -0.2%. This release will be crucial in determining whether the consumer spending slowdown narrative gains traction, which could have broader implications for the dollar and equities. With risk sentiment still tilted toward optimism, markets are likely to remain sensitive to data releases and any new geopolitical headlines.

For now, indices continue to push higher, currencies reflect a risk-on environment, and commodities remain divided, with oil weak and metals finding support. Traders should stay alert as the U.S. session approaches, with retail sales data potentially bringing another wave of volatility.

Source: https://www.axiory.com/analytics/market-news/oil-struggles-while-metals-rebound-dollar-remains