### Global Currency Shifts #### Gold Under Pressure Currently, Threadneedle Street’s policy remains steady. However, if inflation figures, particularly in core services, remain stubborn, expectations for interest rates may change quickly. It’s possible the bank rate will stay the same, but the discussion in the meeting minutes and future guidance will influence the market in the coming weeks. We’re focusing not only on the headline Consumer Price Index (CPI) but also on how core factors react concerning wages and consumer spending. Despite slowing down, the British pound retains a generally bullish trend. The next hurdle is around 1.3750. To get there, we need strong, positive language from the Monetary Policy Committee and a continued decline in the US dollar. Support at 1.3520 is likely to hold, unless there’s an unexpected dovish announcement—which is improbable unless CPI falls significantly. Overall, the outlook remains positive but is sensitive to broader economic changes. In the wider foreign exchange market, the recent rise in the Australian Dollar supports the idea that the recent weakness of the US dollar signals more than just a brief correction. It climbed back above 0.6500, an area it had struggled with for months, largely due to weak US inflation data and dovish comments from Federal Reserve officials. The Euro also gained, with EUR/USD surpassing 1.1600—not thanks to strong European data, but due to changing flows away from the dollar. Interestingly, market volatility remains low, suggesting complacency at these levels. Gold, which usually performs well in uncertain times, is facing challenges lately. Rising real yields in the US are making interest-bearing assets more attractive than non-yielding ones. The $3,380 per ounce mark is being tested, but pressures remain since investors are more inclined towards riskier assets. Equity markets are attracting more investment, and unless new geopolitical tensions arise, gold may find it hard to recover. However, any spike in market volatility could bring gold back into focus. Digital assets have a different narrative. Ripple’s chart now resembles a typical setup for a short squeeze, fueled by renewed speculative interest from recent Middle Eastern events. Geopolitical tensions often influence crypto prices, but this time, it seems local bullishness is mainly due to trading positioning rather than widespread market belief. It’s still a narrow focus for traders. On another note, China’s economic data is mixed but generally shows positive trends. While fixed-asset investments and property activity have slightly weakened, consumer engagement has improved enough to maintain a recovery outlook. Higher retail sales suggest that domestic demand is increasingly vital for economic growth. This shift is subtle but important, reflecting policymakers’ goal of ensuring expansion through consumption rather than relying solely on infrastructure or credit. If these trends continue into Q3, worries about Chinese demand in the global commodity market will likely ease. Traders in interest rate-sensitive markets should pay close attention to future policy comments. A change in how central bankers discuss inflation persistence—both in London and globally—could quickly alter expected yield movements. We must monitor actual data releases and the nuanced language of policy statements to gauge the next direction. Create your live VT Markets account and start trading now.

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