Dollar Weighs on Euro and Metals Before Fed Decision (07.29.2025)

Euro Falls Despite Eased Trade Tensions

The euro briefly rose to $1.176 but later dropped nearly 1.3% to $1.1590, its lowest in a week, as the dollar strengthened after the new U.S.-EU trade deal. The agreement includes a 15% tariff on European exports, down from the earlier 30% threat. Some goods like aircraft parts and certain chemicals are exempt, and car tariffs will also be lowered to 15%. The EU also pledged to buy more U.S. energy and support investment. While the deal is seen as easing trade tensions, markets had largely anticipated it. In Europe, many view the agreement as one-sided. Attention now turns to this week’s Federal Reserve policy decision.

EUR/USD faces resistance at 1.1660, with support at 1.1580.

Yen Steady as Trade Tensions Persist

The yen held around 148.3 per dollar on Tuesday, near its lowest in a week, following three consecutive days of losses due to broad dollar gains and U.S.-leaning trade agreements. President Trump warned that countries avoiding bilateral deals could face 15–20% tariffs. In Japan, the Bank of Japan is expected to keep rates unchanged this week, though an upward revision to its inflation outlook is likely. Meanwhile, Prime Minister Ishiba is under pressure to resign but remains firm in his position.

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

Gold Recovers Slightly, Markets Eye U.S.-China Talks

Gold edged up to around $3,310 per ounce on Tuesday but remained near a three-week low as easing trade tensions reduced safe-haven demand. Markets are watching U.S.-China talks, with hopes for a 90-day extension to the August 12 tariff pause. This follows Sunday’s 15% tariff deal with the EU, while talks with Canada and South Korea continue. The Fed is expected to keep rates steady this week, though a September cut remains on the table.

Gold is testing resistance at $3,320, with support at $3,285.

Pound Slips Below 1.3400 as Dollar Strengthens

GBP/USD declined for a third consecutive session on Monday, slipping below the 1.3400 mark to hit a 10-week low. The drop was driven by broad U.S. dollar strength and a break below a key trendline. With limited UK data, focus has shifted to a packed U.S. economic calendar featuring Q2 GDP (2.4% expected), Wednesday’s Fed decision (no rate change anticipated), June PCE inflation (+0.3% MoM forecast), and Friday’s Nonfarm Payrolls, projected at 110K, down from 147K in June.

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

Silver Eases to $38.10 as Dollar Gains

Silver slipped 0.2% to $38.10 per ounce on Tuesday, following gold’s subdued movement as easing trade tensions and a strong U.S. dollar reduced safe-haven demand. The drop came amid progress in U.S.-China talks and a new U.S.-EU tariff deal. With the dollar near a one-week high, silver became pricier for foreign buyers. Markets now await key U.S. data and the Fed’s policy decision for further direction.

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