Cautious Mood as Powell, Inflation Data, and Trade Talks Loom (09.01.2025)

The EUR/USD traded around 1.16–1.17, supported by Fed rate cut bets after weak U.S. payrolls and softer ISM services data. Eurozone Q2 GDP rose 0.1% and inflation held at 2%, keeping ECB policy steady after eight cuts since 2022. The GBP/USD advanced to 1.34–1.36 after Q2 GDP grew 0.3% and June GDP 0.4%, tempering expectations of further BoE easing following a narrow 25 bps cut vote. The JPY/USD fluctuated between 146.5–147.7 as mixed Japanese data left BOJ policy uncertain, while softer U.S. inflation pressured the yen. The CNH/USD hovered near 7.18–7.19, backed by stronger services PMI and PBOC policy support, though markets awaited tariff truce updates.

In commodities, gold moved between $3,340–$3,390 as investors weighed Fed easing prospects against geopolitical risks, including Trump–Putin discussions on Ukraine. Silver climbed to $37.7–$40.25 on industrial demand and Fed cut expectations. Brent crude recovered to $65–$67 after inventory draws and stronger U.S. demand signals, but remained pressured by OPEC+ supply and Ukraine-related uncertainty.

In equities, the US 100 Tech Index eased to around 23,400, down about 1% in four weeks but still up more than 23% year-on-year. Earnings reports, Fed policy expectations, and geopolitical risks kept sentiment cautious.

Markets now focus on Powell’s Jackson Hole speech, U.S. inflation data, and U.S.–China trade talks, while geopolitical developments around Ukraine remain central to risk sentiment.

EUR/USD Near 1.1705 on Fed Cut Bets

The EUR/USD traded higher near 1.1705 in Asian markets on Monday, supported by rising expectations of a Federal Reserve rate cut. Although July’s PCE Price Index reflected firm inflation, with headline at 2.6% year-on-year and core at 2.9%, traders remain confident that policy easing is approaching. At Jackson Hole, Fed Chair Jerome Powell signaled openness to cuts, while Governor Christopher Waller suggested reductions may be needed, possibly larger if labor market weakness continues. ECB President Christine Lagarde’s remarks later today could also influence the euro’s direction.

The resistance sits at 1.1750, with support at 1.1630.

USD/JPY Higher on Eased BoJ Hike Expectations

USD/JPY advanced to around 147.20 in early Asian trading Monday, as the yen weakened following softer Tokyo CPI figures that lowered expectations for another Bank of Japan rate hike this year. August headline CPI eased to 2.5% year-on-year from July’s 2.9%, while core inflation excluding fresh food slowed to 2.5%, matching forecasts. The softer data curbed BoJ tightening bets, weighing on the yen. In the U.S., Friday’s PCE report showed inflation steady but still above the Fed’s 2% goal, reinforcing expectations for a September cut. Traders now await ISM PMI and Nonfarm Payrolls for fresh direction.

The resistance stands at 148.80, with support at 146.50.

Safe-Haven Flows Lift Gold to Multi-Month High

Gold climbed to nearly $3,480 on Monday, its highest in five months, supported by safe-haven demand. With U.S. and Canadian markets closed for Labor Day, thin liquidity left bullion prone to volatility. The rally followed sharp losses in Asian equities, as Japan’s Nikkei 225 slid after last week’s Wall Street tech sell-off. Renewed trade risks also underpinned demand after a U.S. court ruled Trump’s global tariffs largely illegal, adding to risk-off sentiment.

Gold resistance stands at $3,480, with support at $3,400.

Pound Gains as Markets Expect Fed Easing

GBP/USD edged higher toward 1.3520 in early European trading Monday, supported by a softer U.S. dollar. Ongoing expectations that the Federal Reserve will cut rates at least twice this year kept pressure on the Greenback, helping lift demand for the Pound.

The resistance is at 1.3595, with support at 1.3390.

Silver Surges Above $40, Highest Since 2011

Silver surged 2% above $40 per ounce on Monday, its highest level since September 2011, as expectations of a Fed rate cut this month strengthened. San Francisco Fed President Mary Daly supported easing, citing labor market risks and temporary tariff-driven inflation. Markets now price in an 88% chance of a 25 bps cut despite July’s PCE inflation remaining firm. A U.S. court also ruled most of Trump’s tariffs illegal, while China’s solar boom lifted silver demand through a 70% jump in solar cell exports.

Resistance is at $40.80, with support at $39.