{"id":17021,"date":"2025-08-01T18:14:00","date_gmt":"2025-08-01T22:14:00","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2025\/08\/01\/dollar-sinks-and-gold-surges-as-fed-rate-cut-chances-increase\/"},"modified":"2025-08-01T18:14:00","modified_gmt":"2025-08-01T22:14:00","slug":"dollar-sinks-and-gold-surges-as-fed-rate-cut-chances-increase","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2025\/08\/01\/dollar-sinks-and-gold-surges-as-fed-rate-cut-chances-increase\/","title":{"rendered":"Dollar Sinks and Gold Surges as Fed Rate Cut Chances Increase"},"content":{"rendered":"<div class=\"layout__region nsdq-l-grid__item syndicated-article-body\">\n<section class=\"jupiter22-c-article-body\">\n<div class=\"body\">\n<div class=\"body__content\">\n<p>The dollar index (DXY00) on Friday retreated from a 2-month high and fell by -0.95%.\u00a0 The dollar tumbled Friday after the Jul payroll report showed the US labor market cooled more than expected, bolstering speculation the Fed may cut interest rates as soon as next month.\u00a0 Losses in the dollar accelerated after the Jul ISM manufacturing index contracted by the most in 9 months.\u00a0 The chance of a Fed rate cut at the September FOMC meeting rose to 84% from 40% before today\u2019s payroll and ISM reports were released.\u00a0<\/p>\n<p>The dollar initially rallied to a 2-month high Friday on an increase in safe-haven demand after world equity markets tumbled on concern that President Trump\u2019s tariff policies would derail the global economy. \u00a0Friday\u2019s sell-off in stocks has also boosted some liquidity demand for the dollar.\u00a0<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-wpU\"  class=\"btf-bodymidpagetwothirdswidth-1\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-wpU')) {             googletag.display('js-dfp-tag-wpU');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>     <span>Join 200K+ Subscribers: <\/span> Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.  <\/p>\n<p>\u00a0<\/p>\n<p>US Jul nonfarm payrolls rose by +73,000, weaker than expectations of +104,000, and Jun nonfarm payrolls were revised downward to +14,000 from the previously reported +147,000.\u00a0 The Jul unemployment rate rose +0.1 to 4.2%, right on expectations.<\/p>\n<p>US Jul average hourly earnings rose +3.9% y\/y, stronger than expectations of +3.8% y\/y.<\/p>\n<p>The US Jul ISM manufacturing index unexpectedly fell -1.0 to 48.0, weaker than expectations of an increase to 49.5 and the steepest pace of contraction in 9 months.<\/p>\n<p>US Jun construction spending unexpectedly fell -0.4% m\/m, weaker than expectations of no change.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-pKw\"  class=\"btf-bodymidpagetwothirdswidth-2\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-pKw')) {             googletag.display('js-dfp-tag-pKw');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>The University of Michigan US Jul consumer sentiment index was revised lower to 61.7 from 61.8, weaker than expectations of an upward revision to 62.0.<\/p>\n<p>Atlanta Fed President Raphael Bostic said inflation is still further from target than employment, and he\u2019s not ready to increase projections for 2025 interest rate cuts.<\/p>\n<p>Cleveland Fed President Beth Hammack said the US labor market still appears healthy, though today\u2019s fresh job numbers constituted a \u201cdisappointing report to be sure.\u201d<\/p>\n<p>In the latest tariff news, President Trump late Thursday raised tariffs on some Canadian goods to 35%, and announced a 10% global minimum and 15% or higher tariffs for countries with trade surpluses with the US, effective after midnight on August 7.<\/p>\n<p>Federal funds futures prices are discounting the chances for a -25 bp rate cut at 86% at the \u00a0September 16-17 FOMC meeting and 65% at the following meeting on October 28-29.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-YvA\"  class=\"btf-bodymidpagetwothirdswidth-3\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-YvA')) {             googletag.display('js-dfp-tag-YvA');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>EUR\/USD (^EURUSD) recovered from a 1.5-month low Friday and rallied sharply by +1.11%.\u00a0 The euro surged Friday after the dollar sank on the weaker-than-expected US July payroll report.\u00a0 The euro also garnered support from Friday\u2019s Eurozone economic news that showed the Eurozone Jul CPI rose more than expected, a hawkish factor for ECB policy.\u00a0<\/p>\n<p>The euro initially moved lower Friday on growth concerns in the Eurozone after President Trump announced a 10% global minimum and 15% or higher tariffs for countries with trade surpluses with the US.\u00a0 Also, Friday\u2019s downward revision to the German Jul S&P manufacturing PMI was bearish for the euro.\u00a0<\/p>\n<p>Eurozone Jul CPI rose +2.0% y\/y, stronger than expectations of +1.9% y\/y.\u00a0Jul core CPI rose +2.3% y\/y, right on expectations.\u00a0<\/p>\n<p>The German Jul S&P manufacturing PMI was revised downward by -0.1 to 49.1 from the previously reported 49.2.<\/p>\n<p>Swaps are pricing in an 18% chance of a -25 bp rate cut by the ECB at the September 11 policy meeting.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-odM\"  class=\"btf-bodymidpagetwothirdswidth-4\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-odM')) {             googletag.display('js-dfp-tag-odM');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p>USD\/JPY (^USDJPY) Friday sold off sharply lower by -2.00%. \u00a0The yen recovered from a 4-month low against the dollar Friday and rallied sharply after Japan\u2019s Finance Minister voiced concerns about the weak yen.\u00a0 Also, short covering emerged in the yen on an increase in safe-haven demand after global equity markets tumbled on President Trump\u2019s tariff plans.\u00a0 \u00a0Gains in the yen accelerated Friday after T-note yields dropped on the weaker-than-expected US July payroll and Jul ISM manufacturing reports.\u00a0<\/p>\n<p>The Japan Jul S&P manufacturing PMI was revised upward by +0.1 to 48.9 from the previously reported 49.8.<\/p>\n<p>Japanese Finance Minister Kato said the Japanese government is \u201cdeeply concerned\u201d about movements in the foreign exchange market, including those driven by speculation.<\/p>\n<p>December gold (GCZ25) Friday closed up +51.20 (+1.53%), and September silver (SIU25) closed up +0.217 (+0.59%). \u00a0Precious moved higher Friday, with gold rallying sharply.\u00a0Friday\u2019s weaker-than-expected US July payroll and July ISM manufacturing reports hammered the dollar and boosted precious metals prices.\u00a0 \u00a0Precious metals also garnered support as a store of value as the weak US economic reports boosted the chance for a Fed interest rate cut at the September FOMC meeting to 84% from 40% before the report.\u00a0 In addition, precious metals are climbing due to an increase in safe-haven demand after President Trump announced new tariff rates, which could weaken the global economy.\u00a0 Precious metals continue to receive safe-haven support from geopolitical risks, including the conflicts in Ukraine and the Middle East.\u00a0<\/p>\n<p>Precious metals prices fell back from their best levels Friday on hawkish Fed comments after Atlanta Fed President Raphael Bostic said inflation is still further from target than employment, and he\u2019s not ready to increase projections for 2025 interest rate cuts.\u00a0 Also, concerns about industrial metals demand weighed on silver prices after US manufacturing activity in July contracted by the most in nine months.<\/p>\n<div class=\"ads__inline\">\n<div id=\"js-dfp-tag-xiU\"  class=\"btf-bodymidpagetwothirdswidth-5\">          <script type=\"text\/javascript\">         googletag.cmd.push(function() {             \/\/ Check if ID matches ID in the window.adsList array before calling googletag.display             function isAdInAdsList(id) {             for (var i = 0; i < window.adsList.length; i++) {                 if (window.adsList[i].id === id) {                     return true;                 }             }             return false;         }         if (isAdInAdsList('js-dfp-tag-xiU')) {             googletag.display('js-dfp-tag-xiU');         }         });     <\/script> <\/div>\n<\/p><\/div>\n<p class=\"body__disclaimer\">     On the date of publication,      Rich Asplund              did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.          For more information please view the Barchart Disclosure Policy      here. <\/p>\n<\/p>\n<p class=\"body__disclaimer\">The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n<p>        <script type=\"text\/javascript\">   \/\/ add oddAd class to every odd instance of body .ads__inline for different placeholder styles   let articleAds = document.querySelectorAll('.ads__inline');   for (let i = 0, len = articleAds.length; i < len; i++) {     \/\/ Do the below only if the curent count is less than 12     if ((i < 12) &#038;&#038; (i % 2 === 0)) {       articleAds[i].className += ' oddAd';     }   } <\/script>                                               <\/p>\n<div class=\"jupiter22-c-tags jupiter22-c-tags-default\">\n<h3 class=\"jupiter22-c-tags-title\">         Tags       <\/h3>\n<div class=\"jupiter22-c-tags-container\">Stocks<\/div>\n<\/p><\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The dollar index (DXY00) on Friday retreated from a 2-month high and fell by -0.95%.\u00a0 The dollar tumbled Friday after the Jul payroll report showed the US labor market cooled more than expected, bolstering speculation the Fed may cut interest rates as soon as next month.\u00a0 Losses in the dollar accelerated after the Jul ISM 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