In July, the US ADP Employment Change report showed a surprising increase of 104,000 jobs, beating estimates of 78,000. This positive news bolstered the US Dollar and affected several currency pairs and commodities. The EUR/USD dropped sharply below 1.1500 due to the strong US economic data, while GBP/USD fell to a two-month low, dipping below 1.3300. Gold prices also took a hit, trading close to $3,300 as US Treasury yields increased ahead of announcements from the Federal Reserve.

Federal Reserve Interest Rate Expectations

The Federal Reserve is likely to keep interest rates steady at its July meeting, marking the fifth consecutive hold following a previous reduction. There is ongoing speculation about whether the Fed is delaying necessary rate adjustments amid changes in the labor market. Several articles are available to help traders choose the best brokers for Forex, commodities, and CFDs. Options include brokers with competitive spreads, fast execution, and different trading platforms, enabling traders to make well-informed decisions for 2025. The stronger-than-expected ADP job numbers for July, which added 104,000 jobs, have strengthened the US dollar. This indicates a solid labor market, exerting pressure on other major currencies. All attention is now on the Federal Reserve’s interest rate decision later today. As a result, we see the EUR/USD struggling to maintain the 1.1500 level, a substantial drop driven by robust US data. Likewise, GBP/USD has fallen below 1.3300, reaching its lowest level since May 2025. The strength of the dollar is a key factor for traders in the upcoming weeks.

Impact On Gold Prices

While the Federal Reserve is expected to keep rates steady today for the fifth consecutive meeting, views are shifting. The CME FedWatch tool now indicates a more than 50% likelihood of a rate hike in September, a noticeable increase from last week. This reflects a growing belief that the Fed may need to respond soon due to the high inflation seen in 2022-2023. We are also witnessing an impact on gold, which is currently trading near $3,300 per ounce. With the 10-year US Treasury yield nearing 4.75%, its highest point this year, gold—having no yield—becomes less appealing to investors. This downward pressure on gold is likely to continue if positive economic data persists. For traders, this situation suggests increased short-term volatility, especially around US data releases like the upcoming Non-Farm Payrolls report. It’s wise to consider strategies that take advantage of a stronger dollar, such as buying call options on the USD or put options on pairs like EUR/USD. Recent price movements confirm that betting against the dollar has not been favorable. Given these sharp market movements, it’s essential to ensure our trading infrastructure is robust. We need brokers with competitive spreads and reliable execution to navigate this increased volatility. Quick access to the markets is vital, especially as key levels like 1.1500 in the Euro are under pressure. Create your live VT Markets account and start trading now.

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