The United States dollar has shown resilience at the start of the European trading session on Tuesday (August 5, 2025) after being under pressure since last Friday due to disappointing labor market data in the US.
Market participants are looking forward to the release of more US economic data to bolster confidence that the Federal Reserve may lower interest rates next month. The purchasing managers’ index (PMI) for services from ISM tonight could provide further insights. This is particularly significant since the services sector is the backbone of the US economy, accounting for roughly 70% of economic growth and 80% of employment.
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Here is data from Trading Central:
- ISM services PMI at 21:00 WIB; forecast at 51 vs previous 50.8
GOLD
Gold prices (XAUUSD) fell at the onset of the European trading session, reaching a daily low of $3,354.46 per troy ounce. Compared to Monday’s close, Gold is down more than $25 or 250 pips.
The strengthening dollar has led to profit-taking in Gold following two consecutive days of gains. If tonight’s ISM data comes in better than the forecast, the dollar could strengthen, putting additional pressure on Gold prices.
OIL
Oil prices (CLS10) decreased by $0.83 to $65.38 per barrel by the beginning of the European trading session.
Oil remains under pressure due to OPEC+’s plans to increase production levels by 547,000 barrels in September. This sentiment is likely to continue influencing Oil market movements this evening.
EURUSD
The EURUSD pair reversed to 1.15301 at the start of the European trading session after rising to 1.15880 earlier in the day. The pair is struggling to gain traction despite data from the Eurozone indicating higher producer price inflation (PPI) growth in June.
Last Friday, this currency pair experienced a sharp increase but faced profit-taking actions since the start of the previous week. If tonight’s ISM data shows a higher service sector PMI than the forecast, continued profit-taking on EURUSD is likely.
GBPUSD
GBPUSD is exhibiting volatility within the range of 1.32592 – 1.33027 at the beginning of the European trading session. The upcoming monetary policy announcement from the Bank of England (BoE) on Thursday is making it difficult for this currency pair to rise, as a rate cut is expected.
Thus, if tonight’s US service PMI data is better than forecasted, GBPUSD may experience downward pressure.
USDJPY
USDJPY rose to 147.776 at the start of the European trading session after dipping to 146.614 earlier this morning.
This upward movement indicates a recovering strength in the US dollar, and positive sentiment for USDJPY is likely to increase if the US service PMI exceeds the forecast.
Nasdaq
The Nasdaq index has been trading within a range of 23,313 – 23,396 ahead of the European trading session after a sharp rise earlier in the week. As previously mentioned, the release of the services PMI could trigger significant movements as it is a critical component of the US economy.
If this data is released above the forecast, it would suggest that the US economy remains strong, thus providing positive sentiment to Nasdaq.
