Markets React to Shutdown and Fed Cut Bets (10.06.2025)

Global markets opened the week cautiously as the prolonged U.S. government shutdown entered its second week, weighing on sentiment and driving safe-haven demand. 

The euro held near $1.17 as traders priced in further Federal Reserve rate cuts, while the yen weakened after Japan’s leadership shift revived stimulus expectations. Gold surged past $3,930 to a record high, while silver jumped to levels unseen since 2011. The pound edged lower as the dollar regained strength, though Fed easing expectations limited further losses.

Euro Steady as U.S. Shutdown Extends

EUR/USD slipped to 1.1720 in Monday’s Asian trade, trimming recent gains. The pair found support as the dollar weakened amid rising Fed rate-cut expectations; 95% odds for October and 84% for December, according to CME FedWatch. The prolonged U.S. government shutdown, now in its second week and delaying key data like the September jobs report, also weighed on the greenback.

Technically, 1.1685 is the key support, while resistance is seen at 1.1755 and then 1.1810.

Yen Nears 150 After Pro-Stimulus Leadership Win

The yen fell over 1% on Monday, nearing 150 per dollar after the ruling party’s leadership vote confirmed pro-stimulus lawmaker Sanae Takaichi as Japan’s next prime minister. Her alignment with “Abenomics” policies fueled expectations of a looser fiscal stance. Meanwhile, BoJ Governor Kazuo Ueda reaffirmed the possibility of future rate hikes if growth and inflation meet forecasts, noting that U.S. tariffs are pressuring Japanese exporters, though broader impacts on jobs and wages remain limited.

Resistance is at 150.90, while support holds at 149.1

Gold Breaks $3,900 as Traders Flock to Safety

Gold surged past $3,930 in Monday’s Asian session, hitting a record high on rising Fed rate-cut expectations and safe-haven demand amid the U.S. government shutdown. Geopolitical tensions and Japan’s dovish leadership shift, which could delay BoJ rate hikes, also supported gains. Technical buying above $3,900 added momentum, though a stronger dollar and overbought conditions may lead to short-term consolidation. The broader outlook remains bullish.

From a technical perspective, support is around 3900, and resistance is at 3950.

GBP/USD Opens Lower on Firm Dollar

GBP/USD opened the week lower on Monday, pressured by renewed dollar strength. However, expectations of upcoming Fed rate cuts and the ongoing U.S. government shutdown may limit further dollar gains. The reduced likelihood of additional Bank of England rate cuts in 2025 could also help support the pound.

Technically, support is at 1.3405, with a break lower exposing 1.3325. Resistance sits at 1.3495 and 1.3525.

Silver Surges to 2011 Levels as Fed Cut Bets Rise

Silver climbed above $48.3 per ounce on Monday, its highest since April 2011, as the U.S. government shutdown and rising expectations of more Fed rate cuts strengthened safe-haven demand. Lawmakers again failed to reach a funding deal, halting key operations and delaying major data, including the September jobs report. Markets now nearly fully price in a 25-bp cut this month and another in December.

From a technical perspective, resistance is observed at 48.75, while support is located at 47.95.