Fed Easing and Economic Data Shape Currency and Commodity Trends
Fed easing expectations and upcoming economic data have been pivotal in recent market movements. The EUR/USD pair remains steady around 1.1165 as speculation about potential Federal Reserve rate cuts continues. The USD/JPY shows strength in the yen amid a weaker dollar and contrasting monetary policies between Japan and the US. Gold prices are steady below $2,520, with investors awaiting further Fed insights. GBP/USD reached a multi-year high at 1.3266, fueled by hopes for Fed rate cuts. Silver prices are stable above $30, with market participants focusing on upcoming economic data and Fed policy signals.
EUR/USD Holds Around 1.1165 Amid Speculation of Fed Easing
The dollar index traded around 100.6 and EUR/USD parity around 1.1165 on Wednesday, approaching DXY’s lowest levels since July 2023 as expectations of Federal Reserve interest rate cuts continued to weigh on the currency. Markets are pricing in about a one-third chance that the Fed will cut rates by 50 basis points in September, with over 100 basis points in total easing projected for this year. These expectations were bolstered by dovish comments from Fed officials, who are highlighting increasing risks to the labor market while maintaining confidence that inflation will eventually return to target. Investors are now awaiting the latest initial jobless claims and the Fed-preferred PCE price index report later this week for further insights into the rate trajectory.
In the pair, which has been trading sideways since the beginning of the week, the first support level is at 1.1150. If this level is breached, the next supports to watch will be 1.1100 and 1.1060. On the upside, the first resistance is at 1.1220; if this level is surpassed, the next targets will be 1.1250 and 1.1300.
GBP/USD Peaks at 1.3266 with Fed Rate Cut in Focus
On Tuesday, GBP/USD reached its highest level in several years, peaking at 1.3266, as the British pound continued to benefit from a broad decline in the US dollar. Investors are optimistic about a potential rate cut from the Federal Reserve in September, while anticipation builds ahead of the US Personal Consumption Expenditure (PCE) inflation report, which is not due until Friday. Last Friday, Fed Chair Jerome Powell’s remarks at the Jackson Hole Economic Symposium strongly suggested that the central bank is likely to begin a rate-cutting cycle on September 18, further fueling market enthusiasm. With limited significant economic data expected from the UK, Wednesday is set to be a relatively quiet day on both sides of the Atlantic. Traders will be watching for a speech from Fed Board of Governors member Christopher Waller early in the US session, and later, a speech from Bank of England (BoE) policymaker Catherine Mann, scheduled after the close of the London markets.
For GBP/USD, the initial support lies at 1.3230, followed by 1.3175 and 1.3130 below. On the upside, the first resistance is at 1.3265, with subsequent levels at 1.3300 and 1.3350 if the pair breaks above this resistance.
Fed Rate Cut Speculation Drives Market Movements in Blustering Ways
Markets are focused on upcoming US economic data as expectations for Federal Reserve rate cuts continue to impact currencies and commodities. The EUR/USD pair trades around 1.1130, with key support and resistance levels highlighted amid anticipation of the Q2 GDP and jobless claims reports. The USD/JPY remains under pressure near 144.50, influenced by dovish Fed signals and potential BoJ rate hikes. Gold has climbed above $2,510, bolstered by rate cut expectations and rising Chinese imports, while GBP/USD has dropped below 1.3200, reflecting fading bullish momentum. Silver is trading around $29.40, pressured by a stronger dollar, with market attention on forthcoming economic data to gauge the Fed’s rate cut decision.
EUR/USD Trades at 1.1130 as Markets Eye US GDP and Jobless Claims Data
On Thursday, the dollar index traded near 101 after gaining 0.5% in the previous session and the EUR/USD pair trades at 1.1130. Investors are awaiting key US economic data to assess the Federal Reserve’s monetary policy direction. Today’s releases include the second estimate for Q2 GDP and the latest initial jobless claims, with the Fed’s preferred inflation measure, the PCE price index, due on Friday. Despite this, the dollar index remained close to its lowest levels in 13 months, as expectations mount for the Fed to begin interest rate cuts in September. Fed officials have hinted at imminent rate reductions due to easing inflation and growing labor market concerns, with Fed Chair Jerome Powell stating at Jackson Hole last week that it’s time to adjust policy restrictiveness. Markets are forecasting around 100 basis points in total rate cuts for the year.
In the pair, which has been trading sideways since the beginning of the week, the first support level is at 1.1100. If this level is breached, the next supports to watch will be 1.1060 and 1.1000. On the upside, the first resistance is at 1.1150; if this level is surpassed, the next targets will be 1.1200 and 1.1250.
Gold Climbs as Fed Rate Cut Expected and Chinese Imports Rise
On Thursday, gold climbed above $2,510 per ounce, nearing record highs as expectations of Federal Reserve interest rate cuts continued to encourage the metal. Investors are awaiting further details on the scale of these cuts. Later today, the second estimate for Q2 GDP and the latest initial jobless claims will be released, with the PCE price index report, the Fed’s preferred inflation gauge, due on Friday. According to the CME FedWatch Tool, traders are pricing in a 63.5% chance of a 25 basis point cut and a 36.5% chance of a 50 basis point reduction for the anticipated September rate cut. Markets are also anticipating a total of 100 basis points in rate cuts for the remainder of the year, which would lower the opportunity cost of holding non-interest-bearing assets. Additionally, official data showed that China’s net gold imports via Hong Kong rose by 17% in July, marking the first increase since March.
Technically the first support level is at 2,510. If this level is breached, the next supports to watch will be 2,495 and 2,470. On the upside, the initial resistance is at 2,525; if this level is surpassed, the next targets will be 2,550 and 2,585.
The yen strengthened due to the divergent monetary policies between Japan and the US. The dollar remained stable as investors awaited the PCE price index report, which could influence the Fed’s decision on interest rates. Gold prices rose on the expectation of rate cuts and geopolitical tensions. The pound sterling weakened against the US dollar as traders anticipated higher interest rates in the UK compared to the US. Silver prices were volatile, influenced by the gold market and the upcoming PCE data.
The dollar index remained around 101.4 on Friday after rising for two consecutive sessions as investors awaited the July PCE price index report. The market is looking for signs that prices are decreasing, which would give the Fed more flexibility to lower interest rates. The central bank is expected to start easing in September, with about 100 basis points of total rate cuts anticipated this year. On Thursday, the dollar index rose by 0.3% as recent US GDP data and initial jobless claims helped ease recession fears. Nevertheless, the dollar is set to experience its largest monthly decline since November of last year due to dovish Fed expectations. Additionally, the upcoming Eurozone inflation figures will shape the direction of the EUR/USD pair before the ECB’s interest rate decision.
The first support level is at 1.1060 for the pair. If this level is breached, the next supports to watch will be 1.1000 and 1.0950. On the upside, the first resistance is at 1.1100; if this level is surpassed, the following targets will be 1.1150 and 1.1200.
Gold eased to around $2,510 per ounce on Friday but remains on track for its second consecutive monthly gain. This is due in part to anticipated rate cuts by major central banks, which have reduced the opportunity cost of holding non-yielding gold. Recent US data showed that the Federal Reserve’s preferred inflation measures, the headline and core PCE price indices, were revised downward, highlighting a more significant slowdown in the second quarter. Additionally, initial jobless claims fell below expectations, underscoring a softening labor market. US GDP growth for the second quarter was revised upward, yet markets still expect 100 basis points of rate cuts over the Fed’s remaining three meetings this year. The ECB is also expected to implement rate cuts, given the rapid deceleration in price pressures. Furthermore, gold’s safe-haven appeal has been strengthened by escalating conflict in the Middle East.
Technically the first support level is at 2,510. If this level is breached, the next supports to watch will be 2,495 and 2,470. On the upside, the initial resistance is at 2,528; if this level is surpassed, the next targets will be 2,550 and 2,585.
Dollar Strengthens as US Economic Data Shapes Currency and Commodity Trends
The dollar index holds steady at 101.7, with the EUR/USD trading at 1.1044 as market participants recalibrate expectations for Federal Reserve rate cuts in light of recent inflation data. The USD/JPY has weakened, falling to near a two-week low around 146 due to stronger dollar dynamics and ongoing considerations of potential BoJ rate hikes. Gold has dropped below $2,500, pressured by a stronger dollar and rising bond yields, while GBP/USD has rebounded to 1.3135 amid anticipation of the upcoming US Nonfarm Payrolls report. Silver remains at $28.45, showing a negative divergence from gold as mixed economic signals and recession fears influence its price movement.
The dollar index remained around 101.7 and the EUR/USD 1.1044 on Monday. Investors have scaled back their expectations for aggressive Federal Reserve rate cuts following the latest inflation data and are now looking ahead to a crucial US jobs report later this week. Data released on Friday showed that US core PCE prices increased steadily in July, reducing the likelihood of a substantial 50 basis point rate cut by the Fed in September. Attention is now shifting to the August jobs report as the Fed’s focus moves from inflation to the labor market. Recent comments from Fed policymakers have highlighted concerns about a weakening jobs market while expressing confidence that inflation will eventually meet its target. The dollar maintained its gains across major currencies, reaching a two-week high against the euro.
In the pair the first support level is at 1.1000. If this level is breached, the next supports to watch will be 1.0950 and 1.0900. On the upside, the first resistance is at 1.1100; if this level is surpassed, the next targets will be 1.1150 and 1.1200.
GBP/USD Rebounds to 1.3135 in Early Asian Session
During Monday’s early Asian session, the GBP/USD pair climbed to about 1.3135, reversing a losing trend for three days. With no significant economic data due from the UK this week, GBP/USD movements will largely hinge on the performance of the USD. The focus is now on the US Nonfarm Payrolls (NFP) report for August, scheduled for release on Friday. Current expectations of Federal Reserve easing are weighing on the dollar. Last week, Fed Chair Jerome Powell suggested that a rate cut might be on the horizon due to concerns about the labor market. According to the CME FedWatch tool, traders are now anticipating a nearly 70% chance of a 25 basis point rate cut by the Fed in September, with a 30% chance of a 50 basis point reduction. In contrast, investors are increasingly confident that the Bank of England (BoE) will pursue a gradual policy-easing approach for the rest of the year, which could strengthen the Pound Sterling. A Reuters poll indicates that economists expect the BoE to implement one more 25 basis point rate cut this year.
For GBP/USD, the initial support is at 1.3100, followed by 1.3050 and 1.3000 below. On the upside, the first resistance is at 1.3190, with subsequent levels at 1.3230 and 1.3265 if the pair breaks above this resistance.
The Dollar Index Keeps Steady While Yen Rebounds, Gold & Silver are Stagnant
The dollar index held steady at 101.6, as investors awaited key US jobs data that could influence the Federal Reserve’s rate decision. The EUR/USD pair faced resistance at 1.1100, with support at 1.1000. The Japanese yen rebounded after a four-day decline but faced challenges due to disappointing manufacturing data and potential delays in rate hikes by the Bank of Japan. The USD/JPY pair saw resistance at 147.20 and support at 146.30. Gold prices fell below $2,500, influenced by a stronger dollar and expectations of Fed rate cuts, with resistance at $2,505 and support at $2,485. GBP/USD traded in a narrow range, awaiting US jobs data later in the week, with resistance at 1.3190 and support at 1.3100. Silver remained steady at $28.45, with resistance at $29.00 and support at $28.00, amid mixed economic signals and potential Fed rate cuts.
The dollar index held steady around 101.6 on Tuesday as investors prepared for crucial US jobs data this week, which could impact expectations for the Federal Reserve’s interest rate decision. Key reports include the jobless claims data scheduled for release on Thursday and the August payrolls report on Friday. Fed officials have indicated a willingness to lower borrowing costs due to concerns about the labor market. Recent data released on Friday showed that US core PCE prices increased steadily in July, dampening hopes for a significant 50 basis point rate cut by the Fed in September. Currently, markets are pricing in a 69% chance of a 25 basis point rate cut this month, with a 31% probability for a larger 50 basis point reduction. The dollar reached two-week highs against the euro. Also in Europe, the ECB is also expected to implement rate cuts, following the sharp slowdown in inflation reported in August’s preliminary figures.
In the EUR/USD pair, the first support level is at 1.1000. If this level is breached, the next supports to watch will be 1.0950 and 1.0900. On the upside, the first resistance is at 1.1100; if this level is surpassed, the next targets will be 1.1150 and 1.1200.
Gold remained below $2,500 per ounce on Tuesday, continuing its pullback from last week’s record highs as investors awaited US data to adjust their expectations for the Federal Reserve’s interest rate decision. This week’s key data points include the ISM surveys, JOLTS job openings, ADP employment report, and non-farm payrolls. Several Fed officials have recently raised concerns about increasing risks to the labor market. Markets anticipate a total of 100 basis points in rate cuts over the Fed’s remaining three meetings this year, which would reduce the opportunity cost of holding non-interest-bearing assets.
Technically the first support level is at 2,485. If this level is breached, the next supports to watch will be 2,475 and 2,430. On the upside, the initial resistance is at 2,505; if this level is surpassed, the next targets will be 2,530 and 2,550.
Financial markets witnessed mixed performances on Wednesday, with key currency pairs and commodities reacting to economic data and central bank speculations. The EUR/USD remained steady at 1.1050 as weak US manufacturing data reignited recession fears, affecting expectations for the Fed’s upcoming rate cut. Similarly, the Japanese yen strengthened toward 145 per dollar due to safe-haven demand and anticipation of potential BoJ policy adjustments. Meanwhile, gold steadied above $2,490, as investors evaluated the Fed’s rate outlook amid weak economic indicators, while GBP/USD dipped below 1.3100, pressured by US recession concerns. Silver hovered around $28.00, fluctuating with ongoing economic uncertainty and global conflicts. Markets now await crucial US labor data, which could significantly influence future central bank decisions.
The EUR/USD traded at the 1.1050 level, and the dollar index held steady around 101.7 on Wednesday morning, following a two-week high reached the previous session, as safe-haven demand surged due to weak US manufacturing data rekindling recession concerns. The ISM Manufacturing PMI indicated that factory activity contracted for the fifth month and at a slightly faster pace than expected. US labor market reports, including the latest JOLTS, weekly jobless claims, and monthly payrolls are expected to be released, which could affect the Federal Reserve’s anticipated interest rate cut this month. Currently, markets are pricing in roughly a 60% chance of a 25 basis point cut, compared to a 40% likelihood of a larger 50 basis point reduction.
The first support level is at 1.1000 for the EUR/USD pair. If this level is breached, the next supports to watch will be 1.0950 and 1.0900. On the upside, the first resistance is at 1.1100; if this level is surpassed, the next targets will be 1.1150 and 1.1200.
GBP/USD weakened, briefly dipping below 1.3100 as the currency pair struggled to maintain its bullish stance with a short-term bearish correction. The US dollar gained traction after new Purchasing Managers Index (PMI) figures from the US fell short of market expectations, reigniting fears of a potential US recession. With minimal UK data scheduled for Wednesday, attention remains on the US labor market. The ISM Manufacturing PMI for August came in at 47.2, below the median market forecast of 47.5, and while it was an improvement from July’s multi-month low of 46.8, it was insufficient to bolster market confidence. This prompted investors to retreat from recent bullish positions. The focus now shifts to Friday’s US Nonfarm Payrolls (NFP) report, which will be the last major labor data release before the Federal Reserve’s rate decision on September 18. The NFP report is expected to significantly influence market expectations for the magnitude of a Fed rate cut, with investors fully anticipating the start of a new rate-cutting cycle this month.
For GBP/USD, the initial support lies at 1.3100, followed by 1.3050 and 1.3000 below. On the upside, the first resistance is at 1.3150, with subsequent levels at 1.3190 and 1.3265 if the pair breaks above this resistance.
Economic Data Weighs on Markets: Dollar Stabilizes, Yen Gains, and Gold Seesaws Ahead of Fed Decisions
The currency and commodity markets have shown mixed reactions during a backdrop of fluctuating economic data and central bank policy speculation. The dollar index holds steady as expectations adjust following recent job data, suggesting less aggressive rate cuts by the Fed. This has caused the EUR/USD to hover around 1.1045, closely watching for further data releases that might sway monetary policy. Concurrently, the yen has seen some strength against the dollar, buoyed by domestic wage growth and safe-haven demand, despite weak manufacturing outputs. Gold’s price fluctuates near $2,500 per ounce as investors parse through US economic reports, speculating on the extent and timing of Fed rate adjustments. Meanwhile, GBP/USD shows resilience, supported by optimistic retail spending figures from the UK and a relatively dovish stance expected from the Bank of England. Silver prices have ticked up, reflecting heightened expectations for a forthcoming Fed rate cut, as market participants eagerly await further job reports to solidify their forecasts for interest rate trajectories.
Gold Awaits US Jobs Report Amid Rate Cut Speculation
Gold remained close to $2,500 per ounce on Thursday as investors awaited the crucial US jobs report for further insights into the Federal Reserve’s potential interest rate cuts, which could lower the opportunity cost of holding non-yielding gold. On Wednesday, JOLTS data showed a much larger-than-expected decline in job openings, hitting 2021 lows and reinforcing expectations of a slowing labor market, which fueled speculation for a significant 50 basis point rate cut by the Fed this month. Additionally, the sharp drop in US factory activity reported by the ISM PMI has cast doubt on the US economy’s ability to withstand higher interest rates. Consequently, investors have increased their expectations to 125 basis points in rate cuts over the Fed’s remaining three meetings this year, up from last week’s consensus of 100 basis points. The key US jobs data is set to be released on Friday.
Technically the first support level is at 2,485. If this level is breached, the next supports to watch will be 2,475 and 2,430. On the upside, the initial resistance is at 2,505; if this level is surpassed, the next targets will be 2,530 and 2,550.
