Euro Gains Post-ECB, Yen Holds Firm (03.07.2025)

The euro surged above $1.08 after the ECB's 25bps rate cut, while the yen held strong at 149 per dollar as the dollar weakened.

Yen Benefits from Dollar's Broad Retreat

The Japanese yen held around 149 per dollar, its strongest in five months, benefiting from the dollar’s decline on a stronger euro and Trump’s tariff policies. His selective tariff exemptions and retaliatory measures weakened the dollar further. 

Domestically, BOJ Deputy Governor Shinichi Uchida suggested possible rate hikes if economic projections align but emphasized that Japan’s monetary conditions remain highly accommodative, with only minimal reductions in government bond holdings.

Key resistance is at 152.00, with further levels at 154.90 and 156.00. Support stands at 147.10, followed by 145.80 and 143.00.

Policy Volatility Keeps Gold at $2,900

Gold hovered around $2,900 per ounce, set for a weekly gain. While Trump temporarily paused 25% tariffs on most Canadian and Mexican goods, Canada’s retaliatory tariffs remain, and China’s countermeasures take effect next week.

U.S. labor data showed mixed signals as layoffs hit a 2020 high per the Challenger report, while jobless claims fell more than expected. Investors now await the non-farm payrolls report for further labor market insights and potential Fed policy impact.

Key resistance stands at $2,923, with further levels at $2,955 and $3,000. Support is at $2,860, followed by $2,830 and $2,790.

GBP/USD at 1.2880, Awaits NFP Report

GBP/USD holds modest gains around 1.2880 in Friday’s Asian session, recovering from the previous decline as investors await the US Nonfarm Payrolls (NFP) report. Meanwhile, the US Dollar Index (DXY) extends its five-day decline, pressured by falling Treasury yields, with the 2-year at 3.94% and the 10-year at 4.24%. Markets increasingly expect the Federal Reserve to adopt a more aggressive rate-cutting stance due to economic growth concerns.

Analysts at MUFG Bank suggest the Fed may shift focus from inflation control to economic growth, especially amid tariff uncertainties. Consumer confidence has weakened, reflecting rising household concerns.

In the UK, expectations for BoE rate cuts in 2025 have dropped below 50 basis points. BoE’s Catherine Mann stated that gradual rate changes are ineffective in volatile markets, advocating for larger cuts to provide clearer policy signals.

If GBP/USD breaks above 1.2920, the next resistance levels are 1.2980 and 1.3050. On the downside, support stands at 1.2860, with further levels at 1.2760 and 1.2660 if selling pressure increases.

Dollar Decline Propels Silver Above $32

Silver extended its rally beyond $32 per ounce in early March, supported by a weaker U.S. dollar. The U.S. imposed new tariffs on Canadian, Mexican, and Chinese imports, prompting Canada’s 25% counter-tariffs and China’s additional levies of 10%-15%, along with export restrictions on select U.S. entities.

Investors now focus on Friday’s U.S. nonfarm payrolls report for clues on the Federal Reserve’s monetary policy outlook.

If silver breaks above $32.75, the next resistance levels are $33.15 and $33.80. On the downside, support is at $31.00, with further levels at $30.20 and $29.75 if selling pressure increases.