Ireland’s Consumer Price Index (CPI) for July fell to 0.1%, down from 0.5% in June. The Bank of England cut its policy rate by 25 basis points, causing the GBP/USD to rise above 1.3400. A closely split vote showed that four policymakers wanted to keep rates the same.

European Currency Movements

The EUR/USD remained around 1.1650, although the BoE announcement limited potential gains. In the US, weekly Initial Jobless Claims rose to 226,000, raising concerns about the economy. Gold saw a slight dip, dropping below $3,400 but staying above $3,380. Trump’s tariff announcements affected the market, while hopes for peace between Russia and Ukraine continued. Bitcoin is currently consolidating below the $116,000 resistance level, reflecting market uncertainty. The tariffs imposed by Trump increased market volatility. The US economy shows signs of slowing down, with trade being a major factor. While the most drastic trade changes may have already occurred, future growth could still slow.

Market Volatility Concerns

As of August 7, 2025, we should brace for increased volatility in the British pound. The Bank of England’s tight vote on rate cuts indicates significant divisions, leading to uncertainty about their next steps. Similar indecision during the inflationary period of 2022-2023 resulted in unpredictable price movements in GBP pairs. Ongoing weakness in European data, like Ireland’s falling CPI, alongside rising US jobless claims, complicates the outlook for EUR/USD. With jobless claims reaching 226,000—up from an average of about 210,000 in early 2025—the American labor market shows signs of a slowdown. If US economic news continues to disappoint, we may see EUR/USD break above 1.1700. Gold continues to be a key asset for us amid economic slowdowns and geopolitical tensions. Its ability to hold steady above $3,380, even with a minor correction, indicates strong demand fueled by Trump’s tariffs. This scenario recalls the 2018-2019 period when the US-China trade war drove gold up over 20% as a safe-haven asset. Bitcoin’s current status below $116,000 is a critical phase that requires caution. The market is processing substantial gains from the 2024 halving event and awaits a new driver, with tariff news contributing to uncertainty. We can use options strategies like straddles to prepare for a significant price movement in either direction without betting on the direction. The overarching theme is a slowing US economy, with trade policies posing challenges. With the CBOE Volatility Index (VIX) around 22, investor anxiety is clear. It’s wise to use derivatives for portfolio protection, such as buying put options on major stock indices to shield against a potential downturn in the weeks ahead. Create your live VT Markets account and start trading now.

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