The S&P Global Manufacturing PMI for the United States was 49.8 in July, which was better than the expected 49.5. Although this number is above predictions, it reflects challenges in the manufacturing sector. The EUR/USD pair jumped above 1.1550 after weak US employment numbers and ISM Manufacturing PMI data. Similarly, GBP/USD turned positive above 1.3250 after six days of decline. Gold prices climbed to $3,350, thanks to lower US Treasury bond yields and a refreshed market outlook on the Federal Reserve’s rate plans. In the crypto market, Bitcoin dipped below $115,000, indicating turbulence amid market volatility. In Europe, the economy appears strong, boosted by an EU-US agreement and rising spending in Germany. However, there are concerns about potential interest rate cuts from the European Central Bank (ECB) in late 2025 or early 2026. The article highlights the risks of foreign exchange trading. Leverage can work for or against traders, so it’s essential to understand your investment goals and risk tolerance. It’s wise to consult independent financial advisors for a clearer picture of the risks in forex trading. Data from July 2025 shows a cooling US economy. The Manufacturing PMI at 49.8 is below the 50-point mark, signaling contraction for the first time since late 2024. This, along with a recent Non-Farm Payrolls report showing only 95,000 new jobs instead of the expected 180,000, suggests a slowdown. This economic weakness is pressuring the US dollar, setting us up for its further decline in the near future. The EUR/USD breaking above 1.1550 is the highest since late 2024, while GBP/USD is showing a strong rebound. Strategies benefiting from a weakening dollar, such as buying call options on the euro or pound, look promising. Gold’s rise to $3,350 indicates a flight to safety, a trend likely to continue amid ongoing economic uncertainty. The drop in the 10-year US Treasury yield to 2.85%, its lowest this year, makes non-yielding gold more appealing. Gold-backed ETFs also saw over $15 billion in inflows last month, signaling strong institutional confidence. On the other hand, we should be cautious with riskier assets like cryptocurrency. Bitcoin’s drop below $115,000 reflects a significant 20% decline from its June 2025 peak, suggesting traders are pulling back from speculative markets. It might be wise to consider bearish strategies on crypto assets or avoid them altogether for now. The European economy shows more stability, partly due to the new ‘Atlantic Digital and Trade Pact,’ which benefits export-driven countries like Germany. This relative strength supports the euro’s rise against the dollar. However, we must keep in mind that futures markets are anticipating a 40% chance of an ECB rate cut before March 2026, which could create challenges ahead.

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