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  • Moustafa Ahmed

    Moustafa Ahmed

    EUR/USD: Euro Eyes $1.11 After ECB Cuts Rates to 3.5%, US Dollar Retreats Broadly
    The EUR/USD pair climbed toward the $1.11 mark after the European Central Bank (ECB) lowered interest rates by 25 basis points to 3.5% on Thursday. This was the second rate cut in Europe this year, driven by easing inflationary pressures, and it reinforced the broader trend of central banks reducing rates. Meanwhile, the US dollar lost some ground ahead of the Federal Reserve’s rate-setting meeting on September 18. “Labor cost pressures are moderating, and profits are partially absorbing the impact of higher wages on inflation,” the ECB stated. “Financing conditions remain tight, and economic activity is still subdued, reflecting weak private consumption and investment.” Inflation data for August, as measured by the consumer price index, fell to a three-year low of 2.2%, edging closer to the ECB’s 2% target. The euro has been fluctuating around the $1.11 level for some time, having hit a 2024 high of $1.12, marking a gain of over 5% from its 2024 low of $1.0600.
    The EUR/USD pair climbed toward the $1.11 mark aft
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  • Moustafa Ahmed

    Moustafa Ahmed

    XAU/USD: Gold Hugs $2,500 Mark as Traders Gird Up for Key US Inflation Data
    A market-moving CPI report is anticipated to reveal a decrease in price pressures to 2.6% for August, which would be welcome news for the Federal Reserve if it comes in lower. • Gold prices (XAUUSD) remained flat early Tuesday after a stagnant session on Monday, with little movement. However, this lack of activity can be attributed to traders focusing on an important economic report – the last major one before the Federal Reserve’s upcoming meeting to decide on interest rate cuts. This week, the spotlight for gold will be on US inflation data. • The consumer price index (CPI) is scheduled for release on Wednesday, and gold has already settled around $2,500 per ounce as investors expect positive news. August inflation is forecast to dip to 2.6% from July’s 2.9%. If this happens, the easing inflation would increase investor confidence in the likelihood of a more substantial rate cut, potentially 50bps instead of 25bps. Gold previously hit a record high of $2,530 on August 20. • Moving forward, gold prices may experience some volatility as traders adjust their portfolios in preparation for the CPI report. Although gold is traditionally seen as a hedge against inflation, the current trend of lower inflation has been advantageous for the precious metal. This is because reduced inflation could lead to a larger rate cut, and lower interest rates make gold more attractive by decreasing the opportunity cost of holding a non-yielding asset.
    A market-moving CPI report is anticipated to revea
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  • Moustafa Ahmed

    Moustafa Ahmed

    GBP/USD: Sterling Reverses Gains with 1% Drop as Dollar Surges on Jobs-Fueled Rally
    Both currencies were shaken by Friday’s jobs data, which revealed a decline in the U.S. employment rate but a lower-than-expected number of new jobs. • The GBP/USD pair erased gains of over 1% on Friday. The British pound had been performing well, reaching a session high of $1.3230 and approaching its 2024 peak, before the U.S. dollar halted its progress. U.S. jobs data triggered a swift rally in the greenback, causing the pound to slide, wiping out gains from the previous two days. • The U.S. economy added 142,000 new jobs in August, falling short of the 164,000 consensus estimate. Why did the dollar rise on lower job numbers? Markets had been expecting a 25bps interest rate cut from the Federal Reserve, but the weaker jobs report has led traders to speculate that a quarter-point cut might not be enough, boosting the outlook for the U.S. dollar. However, this could change. • A surprise 50bps cut to interest rates could weaken the U.S. dollar, driving it lower while providing a lift to stocks. Lower rates make borrowing cheaper, encouraging investors to shift toward riskier assets and away from safe-haven investments. As a result, the GBP/USD exchange rate is expected to experience volatility leading up to the Fed’s interest rate decision on September 18.
    Both currencies were shaken by Friday’s jobs data,
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