Markets React to Powell’s Dovish Tone (10.15.2025)

The euro advanced to 1.1623 after Fed Chair Jerome Powell’s cautious remarks weighed on the U.S. dollar, while France’s suspension of pension reforms eased political risk. 

The yen firmed near 151 as investors sought safety amid Japan’s political uncertainty and escalating U.S.–China trade tensions. Gold soared to a record $4,180 per ounce, driven by Fed rate-cut expectations and geopolitical risks, while silver extended gains above $52 as supply shortages deepened. Meanwhile, sterling recovered above 1.33, supported by growing speculation of gradual BoE easing amid softer UK labor data.

Euro Rises as Powell Turns Cautious

EUR/USD rose to 1.1623 as the dollar weakened after Fed Chair Powell’s neutral-to-dovish comments and France’s suspension of pension reforms. Powell cited labor market risks despite a resilient economy, while Fed’s Collins maintained a cautious stance. Rising U.S.–China tensions, including new port fees, weighed on the dollar, while the euro found support from ECB remarks hinting that the next policy move could be a rate cut.

Technically, 1.1580 is the key support, while resistance is seen at 1.1650.

Yen Firms Near 151 on Political Uncertainty

The yen strengthened toward 151 per dollar on Wednesday amid uncertainty over LDP leader Sanae Takaichi’s path to the premiership after the Komeito coalition split. Her pro-Abenomics stance fueled expectations of more fiscal stimulus and loose monetary policy, typically weighing on the yen. Still, safe-haven demand supported the currency as U.S.–China tensions escalated, with Trump threatening a cooking oil embargo after China’s soybean boycott, while Japan’s opposition parties discussed forming a new government.

Resistance is at 152.50, while support holds at 150.40.

Gold Hits Record $4,180 on Fed Cut Bets

Gold surged to a record $4,180 per ounce on Wednesday as investors sought safety amid expectations of further U.S. rate cuts. The rally was driven by escalating U.S.–China trade tensions after Trump accused Beijing of economic hostility over halted soybean imports and threatened a cooking oil embargo. Additional support came from concerns over the U.S. government shutdown and Fed Chair Powell’s warning that slower hiring could threaten growth, signaling room for more monetary easing.

From a technical perspective, support is around 4130, and resistance is at 4220.

GBP/USD Recovers as BoE Cut Bets Build

GBP/USD recovered above 1.3300 on Wednesday as U.S. momentum slowed and the pound pared earlier losses. UK data showed unemployment rose to 4.8%, with jobless claims up 25.8K and regular pay growth easing to 4.7%, the slowest since early 2022. The figures reinforced expectations of gradual BoE rate cuts. The U.S. dollar gained slightly amid political uncertainty and dovish Fed signals.

From a technical perspective, support is around 1.3310, and resistance is at 1.3420.

Silver Extends Gains as Lease Rates Surge in London

Silver rose above $52 per ounce on Wednesday, near record highs amid a global supply squeeze. Tightness in London sent lease rates above 30%, making short positions costly, while strong Indian demand forced some funds to halt inflows into silver ETFs. Dovish Fed remarks on labor market weakness lifted rate-cut expectations and supported metals. Geopolitical tensions, including Trump’s oil embargo threat over China’s soybean boycott, added further pressure.

From a technical perspective, resistance is observed at 52.70, while support is located at 51.30.