Markets Eye U.S. Jobs After Dollar Rally (08.01.2025)

EUR/USD Steady as Fed Stays Cautious

EUR/USD hovered near 1.1417 on Friday, trading sideways as strong U.S. data supported the Fed’s cautious approach to rate cuts. Stronger core PCE inflation and jobless claims highlighted continued economic strength. While the Fed held rates steady, Chair Powell indicated a September cut is not guaranteed. The U.S. Dollar Index edged up 0.16% to 100.05. Meanwhile, inflation in Europe stayed close to the ECB’s 2% goal. Markets now focus on upcoming U.S. jobs, manufacturing, and sentiment data.

EUR/USD faces resistance at 1.1450, with support at 1.1400.

Yen Struggles as Trump Unveils New Tariffs

The Japanese yen traded near 150.7 per dollar on Friday, staying at a four-month low as the dollar remained strong after President Trump announced new tariff measures. He confirmed a 10% global tariff and imposed up to 41% reciprocal tariffs on countries without finalized trade deals, along with a 40% levy on transshipped goods. These steps heightened trade tensions and lifted dollar demand. The Bank of Japan held rates steady on Thursday but raised its inflation outlook for the fiscal year. Officials maintained a cautious tone, citing a likely short-term dip in core inflation and continued uncertainty over global trade and weaker external demand.

The pair is seeing resistance at 151.50, with support at 149.60.

Gold Set for Weekly Loss as Dollar Gains

Gold held near $3,290 per ounce on Friday, heading for its worst weekly loss since late June as a stronger US dollar weighed on prices. The dollar gained after President Trump confirmed a 10% global base tariff and imposed retaliatory duties of up to 41% on countries without US trade deals, along with a 40% levy on rerouted goods. U.S. core and headline PCE data for June came in above expectations, raising concerns about persistent inflation and complicating the outlook for a possible September rate cut. Attention now turns to the July jobs report for clues on the Federal Reserve’s next move.

Gold is testing resistance at $3,320, with support at $3,270.

Pound Falls to $1.32 on Weak UK Outlook

The British pound fell to $1.32 on Friday, its lowest since May 12, as weak UK economic prospects and expected BoE rate cuts pressured sentiment. In contrast, strong U.S. data, including solid Q2 GDP and job gains, have lifted confidence in the dollar. Markets now expect two BoE cuts this year, while Fed cuts appear less likely. Sterling is down 3.7% in July, marking its worst month since September 2022 amid fiscal concerns and slowing growth.

The pair faces resistance at 1.3270, with initial support at 1.3140.

Silver Retreats Despite July Gains

Silver fell to $36.50 per ounce, the lowest since July 9, as a stronger U.S. dollar and reduced geopolitical tensions weighed on prices. The dollar rose on solid U.S. data and new trade moves by President Trump, including 15% tariffs on South Korea, 25% on India, and a 90-day extension for Mexico’s rates, easing supply fears from a top silver producer. Core PCE rose 0.3% in June, while consumer spending was flat. Despite the drop, silver remains over 1% higher in July after briefly surpassing $39 on July 22, the highest since August 2011, supported by tightening supply.

Silver faces resistance at $37.40, with support at $36.25.