The President of the United States, Donald Trump, has once again signed an executive order to raise import tariffs on various countries that have not reached trade agreements. These tariffs will range from 10% to 41% and will take effect on August 1, according to U.S. time.
Despite this, the dollar remains strong as the European trading session kicks off on Friday (August 1, 2025). The reason lies in the accelerated inflation based on the personal consumption expenditure (PCE) in the U.S., which has diminished the likelihood of the Federal Reserve cutting interest rates in September.
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Market participants are currently estimating the probability of a rate cut next month at just 39%, a steep decline from above 60% previously, as indicated by the CME Group’s FedWatch tool.
The release of U.S. labor market data tonight could instigate considerable market movement. This data, along with the PCE inflation, serves as a benchmark for the Fed in shaping its monetary policy. Here are the details from Trading Central:
- U.S. Non-farm payrolls (July) at 19:30 WIB; forecast 110K vs. previous 147K
- U.S. unemployment rate (July) at 19:30 WIB; forecast 4.2% vs. previous 4.1%
- U.S. average hourly earnings (month-on-month/July) at 19:30 WIB; forecast 0.2% vs. previous 0.2%
- U.S. ISM manufacturing PMI (July) at 21:00 WIB; forecast 49.4 vs. previous 49
GOLD
Gold prices (XAUUSD) are moving sideways within the range of $3,281-$3,300 per troy ounce at the beginning of the European trading session. This movement indicates that market participants are waiting for the upcoming non-farm payrolls (NFP) release along with additional labor data.
Based on the forecasts mentioned, the NFP for July is anticipated to be lower than the previous month, while the unemployment rate is predicted to increase. A worse-than-forecast data release could lead to a rebound in Gold prices.
Conversely, if a positive surprise occurs and the actual data outperforms the forecast, Gold may face further downward pressure.
OIL
Oil prices (CLS10) have dropped to $68.68 per barrel at the start of the European trading session. This represents a decrease of $0.57 compared to Thursday’s close. Market participants are weighing the impacts of Trump’s import tariff policy, which comes into effect on August 1.
Oil, having previously hit its highest level in over a month, has seen profits taken due to this factor. There seems to be ongoing potential for profit-taking during tonight’s trading session.
EURUSD
EURUSD has turned downward, touching a daily low of 1.13916 during early European trading. The pair is still under pressure despite Eurozone data indicating inflation growth above the forecast.
This reflects the significant pressure EURUSD is facing due to the strengthening U.S. dollar. EURUSD may rebound if U.S. labor market data comes in worse than expected. Conversely, further downside potential exists for this currency pair if the U.S. labor market remains robust.
GBPUSD
GBPUSD has plummeted 579 points (57.9 pips) to 1.31411 at the beginning of the European trading session. This level marks the lowest point since May 12. Previously, GBPUSD had already dropped for six consecutive days, totaling over 370 pips.
Expectations of the Bank of England (BoE) cutting rates next week continue to pressure GBPUSD. Meanwhile, the likelihood of a Fed rate cut in September is diminishing, especially if the U.S. labor market data comes in better than forecast. GBPUSD may face even more pressure.
USDJPY
USDJPY has reversed direction, trading down to 150.913 at the start of the European session after previously reaching a peak. USDJPY climbed to its highest level since March 28 before being subject to profit-taking.
This elevated position opens up the likelihood for continued profit-taking. However, if U.S. NFP data exceeds forecasts with a lower unemployment rate, USDJPY could receive positive sentiment once again.
Nasdaq
According to previous Macro Overview projections, profit-taking has once again impacted Nasdaq, causing it to drop 226 index points to 23,062.
Nasdaq hit an all-time high yesterday, leading to profit-taking actions. Furthermore, with Trump’s recent tariff increase on countries that have not established trade agreements officially, market participants are evaluating the potential impact on the economy. Thus, the Nasdaq profit-taking trend could persist in tonight’s trading.
