Quick overview
- Investors are focused on the European Central Bank’s anticipated rate cut and upcoming U.S. jobless claims as indicators of the global economic outlook.
- Disappointing U.S. economic data led to a sell-off of the dollar, with the ADP employment report and ISM services index falling short of expectations.
- The Bank of Canada’s decision to hold rates steady resulted in a drop in USD/CAD, while declining oil prices further pressured the Canadian dollar.
- Gold prices remain elevated amid global uncertainty, with strong inflows driven by inflation concerns and geopolitical instability.
Live BTC/USD Chart
BTC/USD
Investors turn their attention to the European Central Bank’s expected rate cut and upcoming U.S. jobless claims, both seen as key signals for the global economic and monetary policy outlook.
U.S. Economic Data Disappoints, Triggering Dollar Sell-Off
Economic releases took center stage today, overshadowing trade rhetoric. Both the ADP employment report and the ISM services index fell short of forecasts, signaling growing cracks in U.S. economic strength. The Federal Reserve’s Beige Book reinforced this narrative, noting signs of a broader economic slowdown.
These weak data points led to a rapid reversal in USD/JPY , which erased most of its prior session’s gains with a 115-pip drop. The dollar also fell broadly against other major currencies. While it managed a slight recovery late in the day, pressure is building for Fed rate cuts, especially after President Trump used social media to intensify his criticism of Chair Powell, calling for lower rates in response to the ADP miss.
Treasury yields also declined, reflecting investor concerns about economic fragility. Despite the volatility in FX and bonds, equity markets ended the day mixed: the DOW Jones and Russell 2000 edged lower, while the Nasdaq and S&P 500 posted modest gains.
USD/CAD Drops on BOC Hold, Oil Prices Weigh on Loonie
In currency markets, USD/CAD dropped to its lowest level since October after the Bank of Canada opted to keep rates steady at 2.75%. Markets had only partially priced in this outcome, with a 26% chance of a cut beforehand. The loonie briefly rallied, revisiting key support levels from last week.
However, gains were capped by declining oil prices. News that Saudi Arabia may continue ramping up supply added pressure to crude and, by extension, to CAD performance.
Today’s Forex Events
ECB Expected to Cut Rates as Inflation Cools
Looking ahead, the European Central Bank is widely expected to lower its deposit rate by 25 basis points this week, bringing it to 2.00%. While Eurozone data has shown mixed trends, easing inflation and softening global demand have laid the groundwork for policy easing.
Analysts forecast another 25-basis-point reduction in September, which would bring the deposit rate to 1.75%. The ECB appears to be steering the economy toward a controlled deceleration rather than a hard landing, with its easing cycle likely to conclude in Q3 as rates approach neutral.
U.S. Jobless Claims Eyed; Gold Stays Elevated
Investors are now awaiting weekly U.S. unemployment claims data, with consensus calling for a slight improvement—236,000 claims in May versus 240,000 in April.
Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD falling below 1.12 but returned above 1.14 this week, and stock markets continued upward too. The moves weren’t too big, but we opened 37 trading signals in total, finishing the week with 25 winning signals and 12 losing ones.
Buyers Remain in Charge in Gold
Meanwhile, GOLD prices remain elevated amid heightened global uncertainty. The yellow metal is hovering near $3,500—levels not seen since April—after rebounding from $3,200 earlier in the month. The safe-haven appeal of gold has been reinforced by persistent inflationary concerns, geopolitical instability, and growing doubts about the Fed’s next steps.
While the metal has been consolidating between $3,120 and $3,500, it continues to attract strong inflows. A sustained breakout above $3,500 remains elusive, but continued risk aversion could tip the balance.
USD/JPY Defies Yield Decline as Capital Flows Shift
A notable divergence appeared in USD/JPY behavior. Despite falling U.S. Treasury yields, the pair climbed from 143.40 to 144.31. This unexpected strength is being attributed to capital outflows from Japan and significant portfolio shifts, rather than interest rate differentials. Geopolitical influences and investor sentiment appear to be driving this move more than traditional fundamentals.
USD/JPY – Daily Chart
Cryptocurrency Update
The 20 SMA Has Turned Into Resistance for Bitcoin
Digital assets are also riding the macroeconomic wave. BITCOIN surged past $110,000, gaining more than 6% over several sessions. Concerns about the U.S. economy, ballooning national debt, and mounting geopolitical tensions have strengthened Bitcoin’s reputation as a hedge against systemic instability.
BTC/USD – Weekly chart
Ethereum Stuck MAs Again
Ethereum joined the rally as well, rising more than 20% since April. The recent Pectra upgrade, which enhances wallet integration and staking capabilities, has sparked renewed institutional interest and added technical momentum to Ether’s performance.
ETH/USD – Weekly Chart
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
