Markets Gain as Fed Cut Bets Strengthen (08.13.2025)

Fed Cut Bets Lift EUR/USD to 1.1680

EUR/USD rose 0.50% to 1.1680 in the North American session after mixed U.S. inflation data and President Trump’s threat to sue Fed Chair Powell. Optimism held as U.S. stocks rallied despite flat headline CPI. While core inflation beat expectations, investors largely ignored it, with over a 90% chance of a Fed rate cut already priced in.

EUR/USD is targeting resistance at 1.1725, with support at 1.1550.

U.S.–China Tariff Truce Pressures Yen

The yen weakened past 148 per dollar on Tuesday, marking a third straight decline as improving global trade prospects reduced demand for the safe-haven currency. The U.S.–China tariff truce was extended for another 90 days, easing tensions and giving negotiators more time to work toward an agreement.

USD/JPY faces resistance at 149.00, with support at 147.00.

Gold Steadies as Fed Rate Cut Expectations Grow

Gold steadied near $3,350 per ounce on Wednesday as traders evaluated the Federal Reserve’s policy outlook following the latest CPI release. July’s headline inflation was 2.7%, slightly below the 2.8% forecast, while core inflation rose from 2.9% to 3.1%. The data eased concerns about tariff-driven price pressures and strengthened expectations for a 25 basis point Fed rate cut in September, supporting the non-yielding metal. Investors now look ahead to upcoming figures, including PPI, weekly jobless claims, and retail sales.

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

Pound Consolidates as Traders Eye UK Data

The British pound rose to $1.344 after UK payrolls fell by only 8,000 in July, the smallest drop since January and better than forecasts for a 20,000 decline. Revisions showed smaller prior losses, suggesting the labour market may be weathering the Labour government’s £26 billion tax hike better than the expectations. Unemployment held at a four-year high of 4.7%, while private-sector wage growth eased slightly to 4.8% from 4.9% but stayed well above the Bank of England’s 2% inflation target level.

GBP/USD is seeing resistance at 1.3580, with initial support at 1.3340.

Chinese Solar Surge Supports Silver Rally

Silver held at $38.2 per ounce on Wednesday, extending its strong year-to-date rally supported by firm industrial demand and expectations of Federal Reserve rate cuts. Much of the optimism came from China’s solar sector, with May installations surging 300% year-on-year to a record 93 gigawatts ahead of new rules that will make grid connections more difficult.

The State Grid Corporation of China also announced over $90 billion in planned grid infrastructure investment this year to cut solar power curtailment and ease concerns about future demand for photovoltaic panels, silver’s main industrial use.

Silver is testing resistance at $39.00, with support at $36.50.