Currencies Stir as Fed Takes the Spotlight (07.30.2025)

The euro rebounded from a one-month low, supported by trade relief, while the yen strengthened on political conflicts and BoJ expectations. Gold and silver hovered near recent lows, pressured by easing trade tensions but still eyeing a potential dovish signal from Powell. Meanwhile, the British pound slid to a 10-week low on weak UK data and growing BoE rate cut bets.

Markets Favor Yen as Dollar Pauses

The yen firmed near 148 per dollar as the greenback softened ahead of the Fed decision. Traders are on high alert for any signals of a September rate cut. On the domestic front, the Bank of Japan is likely to maintain current rates but could revise its inflation forecast upward. Adding to the uncertainty, Prime Minister Ishiba faces growing political pressure but has vowed to stay in office.

The pair is seeing resistance at 148.50, with support at 147.50.

Sterling Pressured by Rate Cut Expectations

Sterling slipped to $1.336, its lowest since late May, as weak UK data shifted attention from inflation to faltering economic momentum. While warmer weather lifted food sales, broader indicators like PMIs disappointed. Traders are now pricing in a 25-basis-point cut by the Bank of England in August, with a second likely before year-end. Meanwhile, the dollar rose following the U.S.-EU trade deal, which introduced 15% tariffs but eased global trade tensions.

The pair faces resistance at 1.3480, with initial support at 1.3270.

Silver Dips, Fed in Focus

Silver eased by 0.1% to $38.14 per ounce, pulling back slightly as traders tread cautiously before the Fed's rate announcement and upcoming U.S. inflation and jobs figures. Unlike gold, silver saw softer interest despite lower Treasury yields and a weaker dollar. Still, the metal remains close to 13-year highs, and any dovish tilt from the Fed could reignite bullish momentum in the near term.

Silver faces resistance at $39.50, with support at $37.40.