Euro and Metals Rise as Dollar Weakens Ahead of Fed Decision (05.05.2025)

The euro edged up to $1.1340 as the U.S. dollar weakened on expectations that the Federal Reserve will hold rates steady this week. The yen gained slightly amid ongoing trade talks and a dovish Bank of Japan outlook. 

Gold climbed above $3,260 and silver rose 0.7% to $32.20, both supported by safe-haven demand and a softer dollar. Meanwhile, GBP/USD approached 1.329 as traders await Thursday’s BoE decision, with markets pricing in a rate cut.

Euro Rises as Fed Seen Holding Rates Steady

The euro rose 0.3% to around 1.1340, rebounding from last week’s low of 1.1266. The U.S. dollar weakened due to strength in Asian currencies, uncertainty over trade policy, and expectations that the Federal Reserve will keep rates unchanged this week. A June rate cut also looks less likely. Trading volumes remained low as Japan and China observed public holidays, limiting market movement.

Resistance levels are seen at 1.1460, then 1.1580 and 1.1680, while support rests at 1.1260, followed by 1.1200 and 1.1150.

Yen Gains Amid Trade Talks and BOJ Downgrade

The Japanese yen edged higher toward 144 per U.S. dollar on Monday, supported by a weaker greenback amid global trade uncertainty. Sentiment improved following President Trump’s comments on China’s openness to a deal and ongoing U.S.-Japan trade talks, which Tokyo hopes to conclude by June. The Bank of Japan held rates at 0.5% but lowered growth and inflation forecasts, while trading remained subdued due to a public holiday.

Resistance is located at 145.90, followed by 146.75 and 149.80. On the downside, support levels are at 139.70, then 137.00 and 135.00.

Gold Rises as China Reviews U.S. Deal Terms

Gold climbed above $3,260 per ounce on Monday as U.S.-China trade uncertainty increased safe-haven demand. Trump said China wants a deal but gave no timeline, while Beijing confirmed it’s reviewing U.S. proposals with conditions. A weaker dollar also supported gold. Markets are now looking to the Fed meeting, where rates are expected to stay unchanged despite Trump’s push for a cut.

Resistance is expected at $3,270, then $3,365 and $3,440. Support stands at $3,200, followed by $3,165 and $3,050.

GBP/USD Hits 1.329 Ahead of BoE Decision

GBP/USD climbed to 1.329 today as the U.S. dollar weakened on speculation about Asian currency revaluations and cautious expectations for the Fed. Attention now turns to Thursday’s Bank of England meeting, where a 25 basis point rate cut is widely anticipated. Investors will look for guidance on further easing toward 3.50% by year-end. The pair also remains responsive to upcoming U.S. data, especially the ISM services report.

If GBP/USD breaks above 1.3430, the next resistance levels are 1.3500 and 1.3550. Support levels are at 1.3200, followed by 1.3050 and 1.2960.

Silver Gains Slightly on Weaker Dollar and Safe-Haven Demand

Spot silver (XAGUSD) rose 0.7% to $32.2 per ounce on Monday, supported by a softer U.S. dollar and stable gold prices, which often guide silver’s direction. Though the increase was moderate, silver drew strength from safe-haven demand amid persistent global trade tensions and growing expectations of possible U.S. interest rate cuts beginning in July. However, low trading volumes due to the Labor Day holiday in China may keep near-term volatility subdued.

The first resistance is seen at $33.80, with higher levels at $34.20 and $34.85 if momentum builds. Support begins at $32.00, followed by $31.40 and $30.20.