The financial markets experienced significant volatility at the start of trading on Monday (September 1, 2025). This movement responded to the inflation data release based on the personal consumption expenditure (PCE) in the United States last Friday evening. The PCE inflation was reported to have grown by 2.6% year-on-year (YoY) in July, matching the growth rate of the previous month. Meanwhile, core PCE inflation, which excludes food and energy sectors, increased by 2.9% YoY, slightly above the June growth rate of 2.8% YoY.
The core PCE inflation release, which did not show significant increases, boosted market optimism that the Fed would cut interest rates twice this year, in September and December.
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This sentiment is likely to continue affecting market movements during today’s European trading session.
GOLD
Gold prices soared over US$38 or 380 pips this morning, reaching around US$3,486 per troy ounce. Gold is now less than US$15 away from its all-time high of US$3,500 per troy ounce achieved on April 22.
The surge in Gold’s price is largely attributed to expectations of two interest rate cuts by the Fed this year. Additionally, President Donald Trump fired Fed Governor Lisa Cook last week, citing allegations of mortgage fraud against her.
This controversial decision came despite Cook not being proven guilty of any wrongdoing. Cook is currently suing over her dismissal.
The market views this move as an attempt by Trump to gain more “control” over the Fed by placing his allies in key positions. Such a situation has provided a favorable environment for Gold, which is regarded as a safe haven asset.
OIL
Oil prices (CLS10) fell by US$0.34 this morning to US$63.65 per barrel, continuing the decline from last Friday. The drop in oil prices is attributed to expectations that demand from the U.S. will remain weak and potential ceasefire talks between Russia and Ukraine.
These sentiments will likely continue to influence oil movements during the European trading session.
EURUSD
EURUSD rose to 1.17144 at the beginning of trading today, compared to Friday’s closing, gaining 291 points (29.1 pips). The currency pair gained positive sentiment from the forecast of two interest rate reductions by the Fed this year.
The U.S. dollar is also facing pressure due to Trump’s action of dismissing Cook, a sentiment that will likely influence EURUSD movements in today’s European trading session.
GBPUSD
Similar to EURUSD, this currency pair also gained in early trading today, reaching a daily high of 1.35288. Compared to Friday’s close, GBPUSD rose by 256 points (25.6 pips).
The pressure on the U.S. dollar has allowed GBPUSD to gain momentum. This sentiment is expected to continue impacting GBPUSD movements during today’s European session.
USDJPY
USDJPY reversed its gains, falling to 146.836 after briefly rising to 147.380. This movement indicates substantial pressure on the U.S. dollar due to expectations of two interest rate cuts by the Fed this year.
Trump’s plans to place his appointees in the Fed have also exerted pressure, as this could lead the Fed to adopt a more dovish stance. This sentiment will likely continue to affect USDJPY movements in the European trading session.
Nasdaq
The Nasdaq exhibited volatility within the range of 23,407 to 23,551 until this afternoon, following a sharp decline last Friday. The Nasdaq has been undergoing profit-taking; additionally, Trump’s attempts to influence the Fed’s decisions have contributed negative sentiment, raising concerns over the independence and credibility of the central bank.
