Markets Eye Fed Cuts as Geopolitical and Trade Risks Persist (08.08.2025)

Euro Keeps Steady on Peace Talk Hopes

EUR/USD held steady near 1.16600 on Friday, after touching 1.17000 on Thursday on optimism surrounding a potential Russia-Ukraine peace summit. Sentiment was lifted by a meeting between U.S. envoy Steve Witkoff and President Putin, which drew praise from President Trump. At the same time, weak U.S. economic data and growing expectations for Fed rate cuts, potentially beginning in September, kept the dollar under pressure. The euro also remained resilient despite softer German figures.

EUR/USD now eyes resistance at 1.1745, while support holds at 1.1590.

BOJ Divided on Hike Outlook

The Japanese yen traded near 147.3 per dollar on Friday, ready to finish the week little changed, as Bank of Japan minutes showed differing views on future rate hikes. Some members supported gradual increases over inflation concerns, with one proposing a hike by year-end, while others favored caution amid economic uncertainty. The BOJ acknowledged U.S. tariff risks but viewed Japan’s recent trade deal with the U.S. positively. June household spending slowed, pressured by inflation and trade factors.

USD/JPY faces resistance at 148.50, with support at 146.00.

Gold Eases but Heads for Weekly Gain

Gold slipped to around $3,380 on Friday as investors took profits, yet remained on track for a second weekly advance, supported by trade tensions and expectations of Fed rate cuts. Trump’s latest tariffs, including 100% on semiconductors and up to 50% on other imports, increased safe-haven demand. Fed’s Kashkari signaled support for rate cuts amid rising jobless claims, while new U.S. tariffs on gold bars may tighten domestic supply. China continued gold purchases for a ninth straight month.

Gold is testing resistance at $3,425, with support at $3,340.

Pound Hits Two-Week High After BoE Cut

The British pound climbed to $1.34, its highest in nearly two weeks, after the Bank of England cut interest rates by 25 basis points to 4%, the lowest level since 2023. The decision exposed clear divisions within the Monetary Policy Committee, passing by a narrow 5–4 margin after an unusual second round of voting prompted by an initial three-way split.

GBP/USD is seeing resistance at 1.3530, with initial support at 1.3340.

Silver Heads for 3% Weekly Gain

Silver rose above $38 per ounce on Friday, on track for a 3% weekly gain, supported by expectations of Fed rate cuts and ongoing trade uncertainty. Soft U.S. employment data strengthened views of a September cut, with another possible in December. On the political front, Trump nominated Stephen Miran to the Fed Board and is considering dovish Governor Waller for Fed Chair. Newly implemented tariffs of 10% to 41% added to concerns over the economic outlook.

Silver is now testing resistance at $39, with support holding around $36.50.