The U.S. Dollar remains robust in Thursday’s trading, bolstered by the release of inflation data based on personal consumption expenditure (PCE) that surpassed expectations.
This release reinforces the Federal Reserve’s stance that the current high interest rates are still appropriate due to the risks of rising inflation. This sentiment is expected to influence market movements during the European trading session on Friday (August 1, 2025), with attention shifting towards the U.S. labor market data release later in the evening.
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Both the PCE inflation data and the labor market metrics are key indicators for the Federal Reserve when setting monetary policy. Here’s a summary of the data to be released by Trading Central:
- Eurozone inflation (consumer price index/CPI) (year-on-year/July) at 16:00 WIB; forecast 1.8% vs. prior 2%
- Core inflation (consumer price index/CPI) Eurozone (year-on-year/July) at 16:00 WIB; forecast 2.2% vs. prior 2.3%
- Non-farm payrolls U.S. (July) at 19:30 WIB; forecast 110K vs. prior 147K
- U.S. unemployment rate (July) at 19:30 WIB: forecast 4.2% vs. prior 4.1%
- Average hourly earnings in the U.S. (month-on-month/July) at 19:30 WIB: forecast 0.2% vs. prior 0.2%
- U.S. ISM manufacturing PMI (July) at 21:00 WIB; forecast 49.4 vs. prior 49
GOLD
Gold prices (XAUUSD) climbed nearly $15 or 150 pips to reach $3,274.86 per troy ounce during Thursday’s trading session. The rebound in gold prices is likely attributed to technical factors following its plunge to a one-month low the previous day.
The strengthening of the U.S. Dollar, coupled with decreasing chances of the Federal Reserve cutting interest rates in September, continues to exert a negative sentiment on gold. This sentiment is expected to play a role in gold’s movements at the start of the European trading session, ahead of the NFP data and labor market release.
OIL
Oil prices (CLS10) decreased by $0.93 to settle at $69.35 per barrel in Thursday’s trading, due to profit-taking activities. The day before, oil had surged to a one-month high.
The oil market still remains under a positive sentiment following the announcement of U.S. sanctions against Russia targeting the energy sector.
This development may lead to a decline in oil supply from Russia, providing a positive outlook for oil prices during the European trading session.
EURUSD
The EURUSD pair advanced approximately 120 points (12 pips) to 1.14118 in Thursday’s session due to short covering. The day prior, this currency pair had hit its lowest point in a month and a half.
The upcoming inflation data from the eurozone later today could trigger significant movement in the EURUSD exchange rate, with increased pressure if the inflation data comes in lower than expected.
GBPUSD
GBPUSD recorded a decline for six consecutive days, finishing Thursday’s trading at 1.31990. Compared to Wednesday’s close, GBPUSD dropped 326 points (32.6 pips) and has fallen more than 370 pips over the last six days.
Expectations surrounding the Bank of England (BoE) cutting interest rates next week continue to weigh down GBPUSD. Meanwhile, the likelihood of the Federal Reserve cutting rates in September is diminishing, creating potential for further downward pressure on GBPUSD.
USDJPY
USDJPY surged approximately 1,250 points (125 pips) to 150.695 during Thursday’s trading, hitting its highest level since March 28. The recent inflation data from the U.S. PCE, which accelerated in June, has further strengthened the U.S. Dollar.
PCE inflation was reported to have increased by 2.6% year-on-year (YoY), exceeding the Trading Central forecast of 2.5% and last month’s figure of 2.4%. Meanwhile, core PCE inflation grew by 2.8% YoY in June, in line with the forecast and last month’s release.
This data has diminished the probability of the Federal Reserve cutting interest rates in September, sustaining a positive sentiment for USDJPY during today’s European trading session.
Nasdaq
The Nasdaq achieved a record high of 23,844 on Thursday before facing profit-taking pressures, ultimately closing at 23,328. This represented a drop of over 330 index points compared to Wednesday’s close.
The lofty position coupled with waning expectations for a Fed rate cut in September triggered a round of profit-taking. There remains potential for profit-taking to continue during the European trading session as market participants await the labor market data release.
