USD Weighs on Euro and Pound as Powell Looms (08.22.2025)

EUR/USD Lower as Rate Cut Odds Fade

EUR/USD eased to 1.1595 in Asian trading on Friday as the U.S. dollar regained strength. Traders now look to Germany’s Q2 GDP and Fed Chair Powell’s speech at Jackson Hole. Although soft U.S. jobs data had lifted hopes for a September rate cut, Fed officials’ cautious remarks and ongoing inflation concerns supported the dollar. Markets currently assign a 75% chance of a 25 bps cut, down from 92% a week ago. Powell may leave options open, with dovish signals potentially weighing on the dollar and lifting EUR/USD.

Resistance is at 1.1645, with key support at 1.1560.

USD/JPY Rebounds, BoJ Outlook in Focus

On Friday, the dollar extended gains against the yen, with USD/JPY rising from Wednesday’s dip below 146.90 toward 147.65. The pair, however, remains confined within a volatile range of 146.70 to 148.00. Traders are now focused on Japan’s July inflation data, which could provide new clues for the Bank of Japan’s upcoming rate decision.

For USD/JPY, the nearest resistance is at 148.80, while the immediate support is at 146.70.

Gold Slips to $3,330 Ahead of Powell

Gold slipped to around $3,330 on Friday, moving within a tight range as investors awaited Powell’s speech at Jackson Hole for policy direction. While Fed officials offered little backing for a September rate cut, markets still assign a 75% probability of a quarter-point move amid slowing job growth and persistent inflation. Hopes for a Russia-Ukraine peace deal also faded after Russia launched its largest strike in over a month and accused Kyiv of rejecting talks. For the week, gold is set to close mostly unchanged.

Gold is currently facing resistance around $3,352, with strong support near $3,310.

Mixed U.S. Data Keeps Pound Under Pressure

GBP/USD held near 1.3410 in Asian trading on Friday after four straight sessions of losses, pressured by a firmer U.S. dollar. Traders are awaiting Powell’s Jackson Hole remarks for policy direction. Recent U.S. data delivered mixed signals: August PMIs exceeded forecasts, while jobless claims climbed to an eight-week high of 235K. The figures highlight the Fed’s challenge of balancing inflation with a cooling labor market. Markets now assign a 74% probability of a September rate cut, down from 82% earlier in the week.

The first resistance is seen at 1.3620, with nearby support beginning at 1.3340.

Silver Nears $38.10 Ahead of Powell’s Speech

Silver traded near $38.10 per ounce in Asian trading on Friday, easing from earlier gains as investors awaited Powell’s speech at the Jackson Hole symposium for policy guidance. The metal remained under pressure from rising opportunity costs. Mixed U.S. data showed stronger PMIs alongside higher jobless claims, underscoring the Fed’s challenge of balancing inflation with slowing growth. Markets now assign a 75% probability to a September rate cut, down from 82% earlier in the week.

The first resistance at $38.40 and support at $37.10.