Important calendar events
The dollar rallied after the Fed rate decision last week, and the dollar index surged from 97.5 to 100.1, its highest level since May. The dollar came under pressure due to disappointing U.S. labor data released on Friday; however, the dollar index ended the week at 98.9. U.S. Treasury yields, on the other hand, sank, with the 10-year bond yield dropping from 4.40% to 4.21%.
The Fed held rates steady at its policy meeting in July, as expected, but Fed Chair Powell struck a more hawkish tone in his press conference, boosting the dollar. Powell acknowledged progress on disinflation but emphasized the need for more data before considering rate cuts.
Markets had been pricing in a September rate cut, but Powell’s cautious stance prompted a pullback in dovish bets, pushing expectations for policy easing further into late 2025. Markets dialed down odds for a September cut from above 60% to below 40% after the Fed rate decision, boosting the dollar. Rate cut odds in September, however, shot up to approximately 80% after the release of disappointing labor data on Friday, as markets reassessed the timing and depth of future easing.
The dollar experienced high volatility in a data-heavy week. Macroeconomic data released last week were overall mixed, indicating an improved economic outlook, combined, however, with sticky inflation and an uncertain labor market.
JOLTS Job Openings released on Tuesday dropped by about 275,000 to 7.44M in June, coming in below expectations of 7.51M, signaling a softening labor market. ADP Non-Farm Employment Change data for July, released on Wednesday, however, were more optimistic. Private payrolls rose by approximately 104K, above forecasts of 77K, indicating that hiring is rising.
Advance GDP data on Wednesday for the second quarter of 2025 showed that the U.S. economy is rebounding. The GDP data showed robust 3.0% annual growth, coming in above estimates of 2.4% and reversing the first quarter’s 0.5% decline. The stronger GDP print boosted the dollar as it suggested increased economic growth.
US Core PCE inflation came in hotter than expected on Thursday, rising 0.3% in June from May’s 0.2%, pushing the annual rate up to 2.8%.
The ISM Manufacturing PMI for July, released on Friday, dropped to 48.0, from 49.0 the previous, missing forecasts of 49.5. This is the fifth consecutive month of contraction for the manufacturing sector, which is sinking even deeper into contractionary territory. At the same time, Initial Jobless Claims on Thursday increased to 218K for the week ending July 26 from 217K the week before, but fell below estimates of 224K.
Nonfarm Payrolls (NFPs) on Friday were disappointing, causing Fed rate cut expectations to rise and the dollar to sink. Payrolls rose by just 73K in July, significantly below the expected 106K, while June’s print was revised downward to 14K jobs. The unemployment rate edged up to 4.2% in July from 4.1% previously, while Average Hourly Earnings rose 3.9% annually in July, up from 3.7% in June, above expectations of 3.8%.
US Headline inflation jumped to 2.7% year-on-year in June from 2.4% in May, against expectations of a 2.6% reading. Monthly Consumer Price Index (CPI) came in at 0.3%, which was in line with expectations but exceeded May’s 0.1% print. Core CPI rose by 0.2% in June, up from 0.1% in May, but fell below expectations of 0.3%.
EUR/USD exhibited high volatility last week. The currency rate sank from 1.177 to 1.139 mid-week, but pared some losses late in the week, rising to 1.158. If the EUR/USD pair declines, it may find support at 1.139, while resistance may be encountered near 1.181.
EUR/USD experienced high volatility early in the week as markets digested the repercussions of the EU-U.S. trade deal. According to the agreement, the U.S. will impose a 15% tariff levy on EU imports, significantly lower than the expected 30%. Easing trade tensions benefited the dollar, putting pressure on the EUR/USD.
The European Central Bank (ECB) held interest rates steady at 2% in July, after cutting rates eight consecutive times. The Euro gained strength after the ECB policy meeting, countering the dollar’s rally. The ECB held rates steady, as expected, but struck a cautious tone, acknowledging progress on inflation but warning of the possible effects of trade tariffs. ECB President Christine Lagarde stated that the central bank monitors rates rather than targeting them, and that policymakers intend to work with the data that comes in moving forward.
On the data front, German Preliminary GDP for the second quarter of 2025, released on Wednesday, showed that Germany’s economy contracted by ‑0.1% quarterly, which was in line with expectations. Germany is the Euro Area’s leading economy, and the weak GDP print put pressure on the Euro. At the same time, Euro Area Flash GDP came in at 0.1% for Q2 of the year, above forecasts of stagnation, but still showing a weak economic growth outlook.
EU flash CPI data on Friday showed that inflationary pressures in the Euro Area remain sticky, reinforcing the ECB’s decision to pause rate cuts and keeping future rate cut odds low. EU flash CPI came in at 2.0% year-on-year in July, matching June’s print and just above expectations of 1.9%, aligning with the ECB’s target and reducing immediate pressure for further easing. Core inflation, which excludes food and energy, remained steady at 2.3% annually in July as forecasted.
Eurozone GDP for the first quarter of 2025 was revised upward to reflect 0.6% expansion, up from 0.3% previously, beating the 0.4% consensus. The upward revision highlights resilience amid global trade headwinds.
GBP/USD remained bearish last week, sinking from 1.358 to 1.313, then paring some losses on Friday and ending the week near 1.327. If the GBP/USD rate goes up, it may encounter resistance at 1.378, while support may be found near 1.313.
The Sterling weakened against the dollar last week as markets are pricing in a Bank of England (BOE) rate cut this coming week.
The Monetary Policy Committee (MPC) members decided to hold rate cuts in a closely split vote in June. MPC policymakers voted to keep interest rates steady at 4.25%, with the vote split 6–3 in favor of holding rate cuts. BOE Governor Andrew Bailey’s post-meeting speech was slightly dovish, hinting at a gradual, data‑driven easing path, but cautioning that this isn’t a signal for an immediate rate cut.
The next BOE rate decision is due this Thursday, August 7. Market odds are in favor of a 25bps cut from 4.25% to 4.00%, although it is not fully priced in. The vote is likely to be split again, with some members pushing back against a rate cut amid concerns over sticky inflation.
Bailey’s stance in recent weeks has been cautious. Bailey has acknowledged cooling wage growth and weak consumer demand, but he has hinted that the BOE is not in a rush to cut interest rates and will remain data-driven.
Markets will follow Bailey’s post-meeting speech closely for hints on the central bank’s policy outlook. A potential voting split will also be scrutinized by traders as the latest MPC interest rate decisions have not been unanimous, and the dissent among policymakers creates uncertainty in the policy outlook. A clear signal that more cuts are coming could weigh on the pound, while a divided vote or a more cautious message from Bailey might boost the Sterling.
GDP data showed that the British economy contracted by 0.1% in May, following a 0.3% decline in April, against expectations of 0.1% growth. This marked the second consecutive month of economic contraction, raising concerns about the UK's economic resilience.
Headline CPI rose to 3.6% year-on-year in June, up from 3.4% in May and beating expectations of 3.4%. Every month, CPI increased by 0.3% in June, up from May’s 0.2%, and in line with forecasts. Core CPI, which excludes food and energy, climbed to 3.7% YoY, above May’s 3.5% and above expectations around 3.5%.
USD/JPY seesawed last week, rising from 147.5 to 150.9 mid-week, then paring gains and dropping back to 147.4 at the end of the week. If the USD/JPY pair declines, it may find support at 142.6. If the pair climbs, it may find resistance at 150.9.
USD/JPY showed high volatility last week, rising to a four-month high after the Bank of Japan (BOJ) rate decision on Thursday.
The BOJ left rates unchanged, as expected, and signaled it’s in no hurry to tighten further. The BOJ raised its inflation forecast, hinting at a tightening path ahead, although the timing of future rate hikes has yet to be determined.
BOJ Governor Kazuo Ueda acknowledged that price pressures are gradually firming and suggested that another rate hike remains on the table. Ueda, however, pointed to uncertainty around wage growth and domestic consumption and stressed the importance of sustained evidence that inflation remains on target before hiking rates further.
Even though both the Fed and the BOJ kept interest rates steady last week, the Fed’s stance was seen as hawkish, while the BOJ’s tone was more cautious, driving the USD/JPY up.
Cooling inflation in Japan has reduced BOJ rate hike expectations, weakening the Yen and pressuring bond yields. Tokyo core CPI came in at 2.9% year-on-year in July from 3.1% year-on-year in June, suggesting cooling price pressures. Headline inflation dipped to 3.3% year-on-year in June from 3.5% in May. Core CPI, which excludes food and energy, cooled to 3.3% from 3.7% in May.
Japan's economy remained stagnant in the first quarter of 2025, exceeding the anticipated 0.2% decline. On an annualized basis, GDP shrank by 0.2%, compared to -0.7% in the previous reading. The BOJ may delay interest rate hikes further to support the country’s weakening economy, especially if trade tensions rise.
Gold prices sank to $3,270 per ounce last week, then bounced back, rising to $3,360 per ounce. If gold prices rise, they may encounter resistance at $3,440 per ounce, while if gold prices decline, support may be encountered near $3,244 per ounce.
Gold prices have typically been directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar rallied last week, and the dollar index surged from 97.5 to 100.1, its highest level since May, putting pressure on gold prices. The dollar came under pressure by disappointing U.S. labor data released on Friday, however, and the dollar index ended the week at 98.9, boosting gold prices. U.S. treasury yields, on the other hand, sank, with the 10-year bond yield dropping from 4.40% to 4.21%.
Gold prices dipped early last week as the EU-U.S. trade deal cooled trading tensions, lowering demand for the safe haven gold. At the same time, the U.S. economic outlook benefited from improved trading relations, boosting the dollar at the expense of the rivaling gold.
Gold prices are supported by rising Fed rate cut expectations. The Fed held rates steady at its policy meeting in July, as expected, but Fed Chair Powell struck a more hawkish tone in his press conference, boosting the dollar.
Markets had been pricing in a September rate cut, but Powell’s cautious stance prompted a pullback in dovish bets, pushing expectations for policy easing further into late 2025. Markets dialed down odds for a September cut from above 60% to below 40% after the Fed rate decision, boosting the dollar.
A disappointing U.S. jobs report on Friday weakened the dollar, boosting gold prices. Nonfarm Payrolls (NFPs) were disappointing, causing Fed rate cut expectations to rise and the dollar to sink. Payrolls rose by just 73K in July, significantly below the expected 106K, while June’s print was revised downward to 14K jobs. Rate cut odds in September shot up to approximately 80% after the release of the labor data on Friday, as markets reassessed the timing and depth of future easing.
Meanwhile, risk sentiment shifted midweek, as the August 1 tariff deadline revived trade tensions, raising safe-haven demand. The risk aversion sentiment was heightened by escalating geopolitical tensions between the U.S. and Russia, boosting gold prices. Tensions between the U.S. and Russia escalated after the U.S. repositioned nuclear submarines in response to Russian threats, while Ukraine launched drone strikes targeting Russian energy infrastructure. The developments raised fears of broader military confrontation, adding a layer of geopolitical risk to global markets.
Oil prices were volatile last week, and WTI price rose from $66.4 to $71.3 per barrel for the first time since mid-June, but dipped to $67.9 per barrel at the end of the week. If WTI price retreats, it may encounter support near $65.4 per barrel, while resistance may be found near $71.3 per barrel.
Oil prices rose early last week, supported by escalating geopolitical tensions and supply concerns. US President Donald Trump amped up the pressure on Russia to end the war with Ukraine. Concerns over U.S.–Russia escalation, along with drone attacks on Russian infrastructure, raised fears of potential disruptions to oil supply, boosting oil prices.
Trump threatened to impose additional tariffs on Russia unless the crisis with Ukraine is resolved. Trump gave Russia a deadline of just 10 days to reach a deal with Ukraine before imposing stiff tariffs. The tariffs will target especially Russia’s oil exports, including secondary tariffs on any country that purchases Russian Crude Oil.
However, a surprise build in U.S. crude inventories put pressure on oil prices on Wednesday. The Energy Information Administration (EIA) announced a surge in U.S. crude inventories by 7.7 million barrels for the week to July 24, against expectations of a drawdown by 2.3M barrels.
Oil prices are kept in check by high central bank interest rates. The Fed held rates steady at its policy meeting in July, as expected, but Fed Chair Powell struck a more hawkish tone in his press conference, boosting the dollar.
Markets had been pricing in a September rate cut, but Powell’s cautious stance prompted a pullback in dovish bets, pushing expectations for policy easing further into late 2025. Markets dialed down odds for a September cut from above 60% to below 40% after the Fed rate decision. Rate cut odds in September, however, shot up to approximately 80% after the release of disappointing U.S. labor data on Friday, as markets reassessed the timing and depth of future easing.
OPEC+ has raised its oil production for August by 548,000 bpd, well above the prior 411,000 bpd. This supply boost signals the cartel’s intent to allow oil prices to ease amid growing concerns over weakening global demand and trade uncertainties.
Bitcoin sank from $119,000 to below $112,000 last week as a ririsk-aversionentiment prevailed. Bitcoin price recovered a little at the end of the week, climbing above $114,000 over the weekend. If BTC price declines, support can be found at $111,000, while resistance may be encountered at the all-time high of $123,150.
Ethereum dipped from $3,900 to below $3,400 last week but rallied to $3,490 over the weekend. If the Ethereum price declines, it may encounter support near $2,600, while if it increases, it may encounter resistance near $4,000.
Bitcoin price reached an all-time high above $123K earlier in July but immediately deflated on profit-taking. Bitcoin began the week near $119,000, bolstered by its recent record high and strong ETF inflows, especially into BlackRock’s fund. However, Bitcoin turned bearish midweek as a risk-aversion sentiment prevailed.
Escalating U.S.–Russia tensions turned traders away from riskier assets, putting pressure on the crypto market,s anthe d Bitcoin price dipped to approximately $115,000. U.S. President Trump ordered the repositioning of two nuclear submarines in response to provocative statements from former Russian President Dmitry Medvedev, heightening fears of a potential military confrontation.
Cryptocurrency prices are also affected by central banks’ interest rates. The Fed held rates steady at its policy meeting in July, as expected, but Fed Chair Powell struck a more hawkish tone in his press conference, boosting the dollar.
Markets had been pricing in a September rate cut, but Powell’s cautious stance prompted a pullback in dovish bets, pushing expectations for policy easing further into late 2025. Markets dialed down odds for a September cut from above 60% to below 40% after the Fed rate decision, putting pressure on cryptocurrencies. Rate cut odds in September, however, shot up to approximately 80% after the release of disappointing U.S. labor data on Friday, as markets reassessed the timing and depth of future easing, boosting crypto markets.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Written by:
Myrsini Giannouli
présence dans l'industrie en tant que fournisseur de liquidités
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