Markets remained sensitive on Tuesday as the US dollar weakened with growing fiscal concerns, stalled trade negotiations, and rising expectations of a September Fed rate cut.
EUR/USD hovered near 1.1790 as uncertainty loomed over the fate of suspended tariffs, while soft German inflation data capped euro gains. The Japanese yen firmed after Trump threatened new tariffs on Japan, though local business sentiment surprised to the upside. Gold climbed above $3,320, supported by geopolitical unease and Fed rate cut bets. Silver stayed resilient around $36, with eyes on Trump’s tariff deadline and fiscal debates in the Senate.
| Time | Cur. | Event | Forecast | Previous |
| 09:00 | EUR | CPI (YoY) (Jun) | 2.0% | 1.9% |
| 13:30 | USD | Fed Chair Powell Speaks | - | - |
| 13:45 | USD | S&P Global Manufacturing PMI (Jun) | 52.0 | 52.0 |
| 14:00 | USD | ISM Manufacturing PMI (Jun) | 48.8 | 48.5 |
| 14:00 | USD | ISM Manufacturing Prices (Jun) | 69.6 | 69.4 |
| 14:00 | USD | JOLTS Job Openings | 7.320M | 7.391M |
The EUR/USD pair remained under pressure near 1.1790 during early European trading on Tuesday, as the US Dollar struggled with rising fiscal concerns and uncertainty surrounding trade negotiations.
According to the Financial Times, US officials are now after smaller, phased trade deals to avoid the reactivation of suspended tariffs. With the July 9 deadline approaching, the Trump administration is reportedly focused on reaching agreements with the most engaged nations, keeping market sentiment fragile and weighing on the currency.
More pressure on the USD comes from growing investor unease over the Senate’s efforts to pass Trump’s tax cut and spending package, which faces internal opposition due to its projected $3.3 trillion increase to the national debt.
The preliminary data from Germany showed inflation easing. The Harmonized Index of Consumer Prices (HICP) rose just 2.0% year-on-year in June, down from 2.1% and below expectations of 2.2%. Inflation increased by only 0.1% monthly, missing the forecast of 0.3%. These figures could limit further gains for the euro, even as the dollar weakens. Later in the day, attention turns to the Eurozone’s HICP data and the US ISM Manufacturing PMI, which is expected to provide further direction for the pair.
Resistance for the pair is at 1.1850, while support is at 1.1730.
| R1: 1.1850 | S1: 1.1730 |
| R2: 1.1910 | S2: 1.1630 |
| R3: 1.2015 | S3: 1.1540 |
The Japanese yen strengthened to 143.5 per US dollar as trade tensions with the US escalated. Trump threatened new tariffs on Japan, citing its resistance to importing US rice, and confirmed that the 25% tariff on Japanese car imports would stay in place due to ongoing trade imbalances. With a key deadline approaching, markets are watching closely to see if Japan can reach a deal with the US before the 24% reciprocal tariff rate is reinstated next week.
Japan’s Tankan survey surprised markets with an improvement in business sentiment among large manufacturers in Q2, showing resilience despite external pressures. The yen also benefited from a weaker US dollar.
The key resistance is at $145.70, and the major support is at $143.55.
| R1: 145.70 | S1: 143.55 |
| R2: 146.20 | S2: 142.45 |
| R3: 147.00 | S3: 141.00 |
Gold climbed to around $3,320 per ounce, extending gains from the previous session, underpinned by the weak US dollar. The dollar retreated with concerns over the ballooning US government deficit, with investors watching the progress of a huge tax-cutting and spending bill slowly advancing through the Senate. Uncertainty surrounding trade deals with major countries also provided support for gold.
Trump threatened to impose a fresh tariff rate on Japan, just over a week before the tariff deadline. Expectations of interest rate cuts by the Federal Reserve later this year also continued to support gold’s appeal. Markets are awaiting the US labor market reports in this holiday-shortened trading week, culminating in Thursday's non-farm payrolls data, for more clues on the Fed’s policy path.
Resistance is at $3,350, while support holds at $3,290.
| R1: 3350 | S1: 3290 |
| R2: 3395 | S2: 3250 |
| R3: 3430 | S3: 3200 |
The GBP/USD pair inched higher during Tuesday’s Asian session, trading near 1.3740. The DXY slipped to its lowest point since February 2022, as markets expect the Federal Reserve to resume rate cuts later this year. While a July cut is seen as less likely, there’s now roughly a 74% chance priced in for a September cut. These expectations were reinforced by last Friday’s PCE report, which showed an unexpected decline in US consumer spending for May.
The US fiscal outlook is adding to the dollar’s depreciation. The Senate narrowly advanced Trump’s massive “One Big Beautiful Bill,” which could add about $3.3 trillion to the federal deficit over the next decade.
Traders remain cautious before speeches from BoE Governor Andrew Bailey and Fed Chair Jerome Powell at the ECB’s Central Banking Forum in Sintra. Upcoming US data, particularly the ISM Manufacturing PMI and JOLTS report, may also influence short-term direction. Overall, the underlying fundamentals continue to favor pound strength in the near term.
Resistance is seen at 1.3760, while support holds at 1.3620.
| R1: 1.3760 | S1: 1.3620 |
| R2: 1.3835 | S2: 1.3520 |
| R3: 1.3900 | S3: 1.3430 |
Silver prices held steady around $36 per ounce after a strong performance in June. Meanwhile, market participants are watching the US Senate’s efforts to pass President Trump’s expansive tax-cut and spending package before the July 4 deadline.
Attention remains focused on whether the US can finalize agreements with key partners before the expiration of Trump’s 90-day tariff reprieve next week.
Resistance is seen at 36.85, while support holds at 35.40.
| R1: 36.85 | S1: 35.40 |
| R2: 37.50 | S2: 34.85 |
| R3: 39.00 | S3: 33.80 |
The euro rose to 1.1660 on optimism over potential Ukraine-Russia peace talks, while the yen held steady as the Bank of Japan signaled room for further hikes. Gold slipped on easing geopolitical tensions, though trade concerns and Fed cut expectations capped losses.
Markets Await Key Inflation and Policy Data (11-15 August)U.S. 10-year Treasury yields rose for a fourth consecutive session to 4.27% on Friday, rebounding from a three-month low. The move followed weak U.S. data, newly announced gold tariffs, and President Trump’s nomination of Stephen Miran to the Fed, which fueled concerns about a politicized central bank. Waning demand at recent bond auctions and rising expectations for rate cuts also influenced markets. Investors now look ahead to next week’s CPI release for policy signals.
Detail Markets Eye Fed Cuts as Geopolitical and Trade Risks Persist (08.08.2025)The euro held steady near 1.1660 on Friday, supported by hopes of a Russia-Ukraine peace summit and weaker U.S. economic data that fueled Fed rate cut expectations.
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