Fed's favorite inflation indicator supports interest rate cuts in September, Trump's tariff measures are sentenced to illegal

On September 1, early trading in the Asian market on Monday, Beijing time, the US dollar index hovered around 98.14. Last Friday, as U.S. inflation data basically met expectations, strengthening the Fed's expectations that interest rate cuts next month, the US dollar index rose first and then fell, and eventually fell slightly by 0.001% to 97.86. U.S. Treasury yields rose and fell mixed, with the benchmark 10-year U.S. Treasury yields closed at 4.233%, and the 2-year U.S. Treasury yields closed at 3.625%. Spot gold rose for four consecutive days, and once stood above the $3,450 mark at the end of the trading session, and finally closed up 0.9%, closing at $3,448/ounce, the best single-month performance since April; spot silver closed up 1.53% to $39.7/ounce. As the market is concerned that the oil supply is imminent, international crude oil has fallen, and the monthly line closes for the first time since April this year. After data showed that the US consumer confidence index fell to a three-month low, WTI crude oil fell sharply in the short term, falling below the $64 mark again, and finally closed down 0.47% to $63.79/barrel; Brent crude oil finally closed down 0.35% to $67.38/barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovered at US$97.82. The dollar rebounded this week after three consecutive weeks of losses. However, it still hovered at the bottom of the annual range, with the U.S. dollar index remaining below 98. Technically, the US dollar index is trying to close below the 97.75 level. If this attempt is successful, it will move towards the nearest support level, which is in the 97.10–97.30 range.

Euro: As of press time, Euro/USD hovered around 1.1693. As optimistic data released by the United States helped the US dollar find support, the upside space of Euro/USD is still limited. Technically, if Euro/USD successfully closes above 1.1700, it will move towards resistance at 1.1785–1.1800.

GBP: As of press time, GBP/USD hovered around 1.3511. GBP/USD entered a consolidation mode after the rebound last weekend. The bulls and bears continued, but due to the general decline of the US dollar, buying opportunities remained favored. Technically, breaking through 1.3500 will push GBP/USD toward resistance at 1.3580–1.3595.

Gold and crude oil market trend analysis

1)Gold market trend analysis

On the Asian session on Monday, gold hovered around 3443.08. Gold maintained its bullish momentum, climbing to its highest level since the end of July, exceeding $3400. Upcoming U.S. macroeconomic data, such as business activity and employment data, may affect the market's pricing of the Fed's policy outlook and drive the short-term trend of XAU/USD.

Technical: The relative strength index (RSI) indicator on the daily chart climbs above 60, and gold continues to stay away from the 20-day, 50-day and 100-day simple moving averages (SMA), highlighting a bullish bias. On the upside, $3450 (static level) is the temporary resistance level, followed by $3500 (historical high). If gold breaks through this level and starts to use it as support, $3600 (integral mark) may become the next obstacle. Looking down, the first support area may be between $3345-3335 (50-day SMA, 100-day SMA).

2) Analysis of crude oil market trends

On the Asian session on Monday, crude oil trading around 63.64. Oil prices are expected to record a second consecutive week. According to reports, ExxonMobil is expected to return to the Russian Far East Coast oil and gas field development project, traders reweighted the prospects of Russia's fuel supply, and oil prices fell from a three-week high. But the possibility of meeting between Russia and Ukraine continues to decrease to support the bottom of oil prices.

Technical: The oil market is bearish. Unless it breaks through the resistance level of $66.18 and generates strong buying interest and new catalysts, the rebound may be short-lived. A break below $61.12 may trigger a deeper selling. At present, traders should expect the market to be under pressure.

Foreign exchange market trading reminder on September 1, 2025

①To be determined Shanghai Cooperation Organization Tianjin Summit held

②09:45 China's August RatingDog Manufacturing PMI

③14:00 UK August Nationwide House Price Index Monthly Rate

④14:30 Switzerland July Real Retail Sales Annual Rate

⑤15:50 France August Manufacturing PMI Final Value

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⑥15:55 The final value of the manufacturing PMI in Germany in August

⑦16:00 The final value of the manufacturing PMI in the euro zone in August

⑧16:30 The final value of the manufacturing PMI in the UK in August

⑨16:30 The central bank mortgage loan license in July

⑩17:00 The unemployment rate in the euro zone in July

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