Currency markets shift

Currencies

In early trading, the Japanese yen leads gains in the FX space, with USD/JPY sliding by nearly 0.5%. The Swiss franc and euro also edge higher, pushing USD/CHF and EUR/USD to 0.3% and 0.25% respective moves.

The euro hovers near 1.1340, recovering modestly after a two-day dip. The Canadian dollar is holding firm, brushing off concerns over potential auto tariffs. Meanwhile, the Australian dollar stands out as the lone G10 underperformer, dipping slightly against the greenback.

Commodities

Spot gold is easing from its intraday peak, now trading just under $3,320 as European markets open. Despite the pullback, the metal remains in positive territory for the first time this week. The move comes amid cautious remarks from U.S. Treasury Secretary Scott Bessent, who downplayed chances of an imminent breakthrough in trade negotiations with China—helping keep gold’s safe-haven appeal alive.

Additional tailwinds for bullion include growing market conviction that the Federal Reserve is preparing to resume rate cuts, alongside a softening U.S. dollar. That said, optimism over a potential U.S.-China accord and signs of easing political pressure on the Fed are keeping the gold rally in check for now.

Macro focus today remains squarely on evolving policy signals. While President Trump criticized Fed Chair Jerome Powell for holding back on rate cuts, economic indicators such as robust jobless claims and a steady housing market continue to justify the Fed’s current stance. Traders are also eyeing commentary from Fed officials and key data from the eurozone, particularly Germany’s Ifo business sentiment survey and remarks from ECB’s Philip Lane.