FX and Metals Climb on Softer US Inflation (08.14.2025)

The euro traded near 1.1770, a three-week high, as soft US inflation pushed the dollar to its weakest since late July and strengthened Fed rate cut expectations.

The yen rose to 146.5, gold advanced, and the pound reached $1.355 after the strong UK labour data. Silver gained 1% to $38.30 as traders priced a 94% chance of a September Fed cut.

Euro Hits 3-Week High Against the Dollar

The euro traded at 1.1770, close to a three-week peak, as the dollar hit its lowest since late July on US inflation data bolstering September Fed rate cut expectations. The ECB ended its easing cycle in July after eight cuts over the past year, though another move remains possible before year-end. The Eurozone economy grew 0.1% in Q2, with July inflation steady at 2%. Markets await US PPI data for Fed guidance.

EUR/USD is targeting resistance at 1.1770, with support at 1.1640.

Yen Climbs on Rate Cut Bets

The yen strengthened to 146.5 per dollar, a three-week high, as softer US inflation and signs of labor market cooling fueled Fed rate cut expectations. Treasury Secretary Scott Bessent called for multiple cuts, possibly starting with 50 bps.

USD/JPY faces resistance at 148.00, with support at 145.00.

Gold Extends Rally on Growing Fed Rate Cut Bets

Gold prices marked a third consecutive day of gains as traders heightened bets on the Federal Reserve resuming rate cuts. Softer US CPI data eased concerns over tariff-induced inflation, while signs of labor market weakness strengthened the case for more monetary easing. Markets are now almost fully pricing in a 25 bps cut in September, with some anticipating a larger 50 bps move. Treasury Secretary Scott Bessent also urged multiple cuts, favoring an initial half-point reduction while Trump’s threats of lawsuits continued.

Gold is testing resistance at $3,400, with support at $3,320.

Pound Reaches 3-Week Peak

The pound rose to $1.355 after UK labour data showed payroll losses of just 8,000 in July, far below forecasts of 20,000. Unemployment held at 4.7%, and private-sector wage growth slowed slightly to 4.8%, still above the BoE’s inflation target. GDP figures due later today are expected to show a yearly contraction but a monthly gain.

GBP/USD is seeing resistance at 1.3620, with initial support at 1.3340.

Silver Gains as Inflation Data Lifts Cut Expectations

Silver climbed 1% to $38.30 an ounce, its second day of gains, after US inflation figures boosted expectations of a September Fed cut. Headline CPI stayed at 2.7%, below forecasts, while core inflation rose to 3.1%, the highest in six months. Markets now price a 94% chance of a 25 bps move next month, with another cut likely by year-end.

Silver is testing resistance at $39.25, with support at $36.50.