The US dollar managed to strengthen on Wednesday, although within a limited range, as investors continued to look for new indicators regarding the Federal Reserve’s policy direction.
However, the markets remained shrouded in uncertainty following President Donald Trump’s attempt to dismiss Fed Governor Lisa Cook. This move raised concerns about the central bank’s independence, particularly since the case may now extend into the legal sphere.
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Meanwhile, in Europe, the spotlight remains on France, where Prime Minister Francois Bayrou is working to maintain his minority government ahead of a no-confidence vote set for September 8 regarding budget cut plans.
GOLD
Gold prices decreased to $3,384 per troy ounce at Thursday’s opening (August 28), as profit-taking occurred and the US dollar rebounded, despite political issues surrounding the Fed’s independence continuing to dampen sentiment. This decline is expected to be limited as the Fed’s dovish stance and ongoing global geopolitical tensions support demand for safe-haven assets. Gold has the potential to resume its rise during the European afternoon session, targeting the nearest resistance level.
OIL
Oil prices faced downward pressure again due to concerns about demand falling off post-summer. The negative sentiment grew stronger even as EIA data showed inventory drops, compounded by US tariff increases on India adding more pressure. The potential for further decline remains open and may continue into the European afternoon.
EURUSD
EURUSD reversed its weakness during Wednesday’s trading and opened stronger at 1.16548 during the early Asian session today. Nevertheless, the upside appears limited due to political instability in France, which poses a risk of triggering new sell-offs as the European session unfolds.
GBPUSD
GBPUSD rose to 1.35283 at the start of Thursday’s trading. The pound is being supported by expectations of sustained high interest rates from the Bank of England, while the Fed’s dovish policy continues to exert pressure on the US dollar. This situation opens the door for GBPUSD to strengthen further through the afternoon session.
USDJPY
The Japanese yen continues to receive support from expectations of the Fed’s dovish policy. According to CME FedWatch, the market is projecting an 88.2% chance of a 25 basis point rate cut in September. In contrast, the Bank of Japan has started signaling a more hawkish stance on future interest rates, making movements in USDJPY increasingly dynamic.
NASDAQ
The Nasdaq index closed lower during Wednesday’s trading, dragged down by a decline in Nvidia shares. Despite the company reporting earnings and revenue that exceeded expectations, investors highlighted that data center revenues fell short of targets for the second consecutive time, alongside signs of growth slowdown. This situation triggered profit-taking after Nvidia’s stock price surged nearly threefold throughout this year.
