Markets Lifted by Dovish Fed and Weaker Dollar (10.17.2025)

The euro advanced toward 1.17 on Friday as the dollar weakened following the Federal Reserve’s latest 25 bps rate cut and dovish guidance. 

Fed Chair Powell’s remarks on labor market risks and soft inflation data reinforced expectations for further easing, while the ECB kept policy steady. The yen neared a two-week high after BOJ hints of potential tightening, gold extended its rally above $4,300 amid safe-haven demand, and silver surged beyond $54 on credit stress fears. Sterling steadied above 1.34 after data showed modest UK growth but lingering fiscal challenges.

Euro Strengthens Toward 1.17 on Fed Easing Signals

EUR/USD rose for a third straight session Friday, approaching 1.1700 as a weaker dollar and improved risk appetite lifted the pair. Persistent U.S.–China tensions added caution, though both sides signaled ongoing dialogue. The Fed’s 25 bp rate cut and dovish stance, along with softer labor data, weighed on the greenback, while the ECB kept policy unchanged, expressing confidence in gradual inflation moderation and data-driven decisions ahead.

Technically, 1.1650 is the key support, while resistance is seen at 1.1740.

Yen Nears Two-Week High on BOJ Hike Hints

The Japanese yen strengthened to around 150.3 per dollar on Friday, nearing a two-week high after BOJ Governor Kazuo Ueda hinted a rate hike could occur if confidence in the economy improves. While an October move remains unlikely, investors are watching upcoming data and the delayed selection of Japan’s next prime minister. The yen also drew support from safe-haven demand and a weaker dollar amid U.S.–China trade tensions, the prolonged U.S. government shutdown, and dovish Fed signals.

Resistance is at 151.60, while support holds at 149.60.

Gold Extends Rally on Dovish Fed

Gold climbed to around $4,340 per ounce on Friday, nearing record highs as safe-haven demand strengthened amid persistent U.S.–China tensions and the ongoing government shutdown. Expectations of further Fed rate cuts gained traction after Chair Powell warned that labor market weakness could slow growth. Investors now anticipate a 25 bp cut this month and possibly another in December, while strong central bank buying and ETF inflows have driven gold gains beyond 60% this year.

From a technical perspective, support is around 4290, and resistance is at 4400.

GBP Steady as UK Growth Eases Fiscal Pressure

The British pound held above $1.34 on Friday after UK GDP met expectations, easing pressure on Finance Minister Rachel Reeves ahead of the November 26 budget. The economy grew 0.1% in August after a July contraction, led by manufacturing while services stagnated and construction declined. Annual growth of 1.3% remains weak, prompting talk of possible tax hikes and spending cuts. Traders increased bets on BoE rate cuts next year, even as the IMF warned UK inflation will stay the highest in the G7 through 2026.

From a technical perspective, support is around 1.3380, and resistance is at 1.3484.

Silver Rallies on Fed Cut Bets and Market Stress Fears

Silver held above $54 per ounce on Friday, set for an 8% weekly gain amid tight supply and strong safe-haven demand. Market jitters grew after two U.S. regional banks reported loan troubles, stoking credit stress fears. Escalating U.S.–China tensions, the prolonged government shutdown, and expectations of further Fed rate cuts also lifted demand for precious metals. Rising geopolitical risks and fiscal concerns added to inflows, while a supply squeeze in London and strong Indian demand forced some mutual funds to suspend new silver ETF inflows.

From a technical perspective, resistance is observed at 54.70, while support is located at 53.20.