Markets Open Week on Softer Dollar (02.09.2026)

The dollar index slipped to around 97.5 as delayed U.S. data due to the shutdown kept markets cautious, with investors expecting steady Fed policy until summer while risk appetite and Japan’s election added pressure against the yen.

Markets opened the week with a softer US dollar, allowing EUR/USD to rebound above 1.1800 as investors reassessed Federal Reserve expectations following cooling US labor signals and easing geopolitical tensions. The yen recovered after Prime Minister Takaichi’s decisive election victory revived intervention talk, while sterling stabilized near recent lows amid a more dovish Bank of England tone. Precious metals strengthened as well, with gold hitting a weekly high on dollar weakness and steady central bank buying, and silver extending a sharp recovery after heavy liquidation. Attention now turns to delayed US payrolls and upcoming inflation data for clearer direction across currencies and metals.

EUR/USD Rebounds as Dollar Eases

EUR/USD climbed above 1.1800 on Monday, extending its recovery as the US Dollar softened. While the ECB held interest rates steady at 2.15% last week, market focus has shifted to the Federal Reserve following cooling US labor signals. Easing geopolitical tensions further pressured the greenback. Investors now await Wednesday’s rescheduled Nonfarm Payrolls and upcoming inflation data for definitive clues on the 2026 interest rate path.

For EUR/USD, the first resistance is at 1.1870, while the initial support level is found at 1.1770.

Yen Recovers After Takaichi’s Landslide Win

The Japanese Yen strengthened past 157 per dollar on Monday, recovering from two-week lows after Prime Minister Sanae Takaichi’s LDP secured a two-thirds supermajority. While the victory grants Takaichi a mandate for expansionary fiscal policy and potential tax cuts, officials’ warnings on currency volatility fueled intervention speculation. The result boosted equities to record highs but pressured bonds, as markets weighed growth prospects against Japan’s debt trajectory.

Technically, resistance stands near 157.30, while support is firm at 156.20.

Gold Hits Weekly High as Dollar Softens

Gold surged over 1% Monday, clearing $5,020 as a weaker Dollar boosted safe-haven appeal. Investors are eyeing Wednesday’s delayed US jobs report and Friday’s CPI data for Fed guidance. Bullion found additional support from the PBOC’s 15th straight month of purchases, Japan’s election outcome, and cautious optimism surrounding ongoing nuclear negotiations between the US and Iran in Oman.

Gold sees support near $4920, while resistance is around $5095.

Pound Stabilizes Near $1.36

Sterling steadied near 1.3600 on Monday following its sharpest weekly decline since October. Political tension over Prime Minister Starmer’s diplomatic appointments weighed on the currency alongside a dovish shift at the Bank of England. While the BoE held rates steady, a narrow vote split revealed increasing support for imminent cuts as cooling inflation and slowing demand become primary concerns for policymakers.

From a technical view, support stands near 1.3550, with resistance around 1.3640.

Silver Eyes $80 After Dramatic Recovery

Silver climbed over 2% Monday, nearing $80 as it extended a sharp rebound from recent historic selloffs. Investors returned to the metal following a massive liquidation phase that erased nearly half its value since late January. Market sentiment improved after Prime Minister Sanae Takaichi’s landslide election victory in Japan, which increased expectations for expansionary fiscal support. While US-Iran talks in Oman eased some geopolitical tension, traders remain focused on this week’s US employment and inflation data for definitive Federal Reserve policy cues.

From a technical view, resistance stands near $83.50 while support is located around $77.00.