Euro Gains as Eurozone GDP Hits 0.6% (06.12.2025)

The euro approached a three-year high on diverging policy paths between the ECB and Fed, while the Japanese yen gained ground with renewed U.S. tariff threats.

Euro Nears 3-Year High on ECB-Fed Policy Split

The euro stayed strong above $1.14, nearing a three-year high, as diverging signals from the ECB and Fed shaped sentiment. While the ECB delivered its eighth rate cut in a row, bringing the deposit rate to 2%, officials hinted at a pause to assess the impact of U.S. tariffs. Meanwhile, Eurozone inflation eased to 1.9% and GDP rose 0.6% in Q1, the best since late 2022. In contrast, softer U.S. CPI data heightened speculation that the Fed could begin cutting rates by September, though resilient labor markets and tariff risks keep uncertainty high.

Resistance is located at 1.1530, while support is seen at 1.1460.

Yen Rises to 144 on Continued Demand

The yen strengthened to around 144 per dollar as investors turned to trusted assets following new U.S. tariff threats. President Trump announced that new tariffs would be imposed unilaterally to advance trade deals, rattling global markets. Japanese business confidence dropped further in Q2. Despite remaining cautious, BoJ Governor Kazuo Ueda said rate hikes are still on the table if inflation nears the 2% goal.

Resistance is at 145.30, while support stands near 142.50.

Gold Jumps to $3,370 on Baghdad Developments

Gold rallied to around $3,370 per ounce on rising geopolitical tensions and increased speculation over U.S. rate cuts. The U.S. evacuated embassy staff in Baghdad over threats linked to Iran, and Trump’s new tariff plans added to the uncertainty. Soft U.S. CPI data increased bets on a Fed rate cut by September, with 50 basis points now priced in for 2024. Traders await PPI figures and next week’s Fed meeting for further direction.

Resistance is seen at $3,392, while support holds at $3,350.

New UK Budget Plans Pushes Pound

The pound climbed to $1.353, approaching a three-year high, as a weaker U.S. dollar lifted global risk sentiment. Domestically, Chancellor Rachel Reeves unveiled a multi-year £2 trillion spending plan. While it enhances public services, limited fiscal space may necessitate future tax increases. Despite signs of rising unemployment and slowing wage growth, markets expect the BoE to hold rates steady. A preliminary U.S.-China trade deal also supported the overall market mood.

Resistance is at 1.3600, with support around 1.3425.

Silver Pulls Back to $36, Outlook Strong

Silver slipped to around $36 per ounce after reaching a 13-year high, as traders locked in gains. Still, long-term fundamentals remain bullish. Industrial demand, especially from solar energy and electronics, now makes up over half of global consumption. The market faces a fifth straight year of supply deficits, though the shortfall is expected to shrink by 21% in 2025. Weaker U.S. inflation has also reinforced expectations of Fed rate cuts, supporting precious metals overall.

Resistance is set at 36.90, while support stands at 35.40.