Fed Cut Bets Lift Euro and Metals (09.29.2025)

EUR/USD Extends Gains as Fed Cut Bets Rise

EUR/USD rose for a second session, trading near 1.1720 in Asian hours on Monday as the U.S. Dollar weakened. The move followed August inflation data that strengthened expectations for further Fed easing. Headline PCE rose 2.7% year-on-year, up from 2.6% and in line with forecasts, while core PCE stayed at 2.9%. The Fed cut rates by 25 basis points in September to 4.00%–4.25%. Markets now price an 88% chance of another cut in October and 65% in December, according to CME’s FedWatch Tool.

Technically, 1.1640 is the key support, while resistance is seen at 1.1760 and 1.1775.

Yen Strengthens on U.S. Shutdown Fears

The yen strengthened to 149 per dollar on Monday, lifted by U.S. shutdown concerns and a softer greenback. Markets await key U.S. data for Fed signals, while Japan eyes the Tankan survey and other releases. BOJ minutes showed openness to rate hikes, with two recent dissents hinting at possible tightening. The ruling LDP votes on October 4 to replace outgoing Prime Minister Shigeru Ishiba.

Resistance is at 150.20 while support holds at 147.80.

Gold Breaks $3,800 on Fed Cut Bets

Gold surged past $3,800 in Asian trading Monday, hitting a record high as in-line U.S. inflation data boosted expectations of further Fed rate cuts. Lower yields and persistent geopolitical tensions continue to fuel safe-haven demand. Traders now await remarks from Fed officials, with any hawkish signals likely to lift the dollar and weigh on gold.

From a technical perspective, support is around 3782 and resistance is at 3850.

Pound Rises to 1.3415 on Fed Cut Bets

GBP/USD edged up to 1.3415 in early Asian trade on Monday, supported by a weaker dollar after August inflation data reinforced expectations of more Fed rate cuts. The PCE Price Index rose 2.7% annually and core PCE 2.9%, both in line with forecasts. The Fed cut rates by 25 bps in September, and markets now price an 88% chance of another cut in October and 65% in December, according to CME FedWatch.

Technically, support is at 1.3370, with a break lower exposing 1.3325. Resistance sits at 1.3495 and 1.3525.

XAG/USD Hits 14-Year High on Fed Cut Bets

Silver (XAG/USD) surged to a 14-year high of $47.10 in Asian trade Monday, supported by expectations of more Fed rate cuts. US August PCE inflation matched forecasts at 2.7%, with core at 2.9%. CME FedWatch shows an 89% chance of an October cut and 66% for December. Lower rates support the appeal of non-yielding assets, lifting silver alongside broader precious metals demand.

From a technical perspective, the resistance is seen at 48.00, while the support is at 45.95.