Support
Aussie softens as RBA minutes confirm dovish bias
Tariff deadline, trade diplomacy, and Fed criticism shape cautious market tone.
Australian dollar dips as RBA minutes highlight strong bias toward further easing.
Gold holds near multi-week highs amid tariff uncertainty and global trade tensions.
U.S. Treasury reiterates August 1 tariff rollout, Japan resumes talks to avert auto duties.
Fed faces political scrutiny; Nasdaq 100 extends technical streak, platinum surges.
Aussie under pressure as RBA signals further rate cuts
The Australian dollar edged lower in Tuesday’s Asian session after minutes from the Reserve Bank of Australia's July meeting confirmed a dovish tilt. Despite the surprise hold at 3.85%, the Board remains inclined to ease further, with discussions centering on when rather than if another cut should occur.
Markets are now heavily pricing in an August rate cut, especially with Q2 CPI data due soon. A downside surprise could cement expectations for policy action. The RBA minutes noted persistent global uncertainty, the drag from U.S. tariffs, and soft domestic growth as ongoing headwinds—underscoring the case for more accommodation.
Across the Tasman, the New Zealand dollar underperformed despite solid trade data, weighed down by broader risk sentiment. Meanwhile, the post-election rebound in the yen is losing steam, with short-covering fading. Safe-haven demand shifted to the Swiss franc, which led G10 performance on the day, followed by the dollar and Canadian dollar. The euro and pound remained rangebound.
U.S. tariffs loom as Japan returns to the negotiating table
U.S. Treasury Secretary Scott Bessent reaffirmed that August 1 remains the activation date for a sweeping round of new tariffs. However, in a CNBC interview, he framed the move more as a pressure tactic than a strict deadline, saying, “The important thing here is the quality of the deal.” The statement reinforces the Trump administration’s strategy of using tariffs as leverage rather than immediate punishment.
Japan has resumed trade talks in Washington, with chief envoy Akazawa Ryosei returning for the eighth round of negotiations. Tokyo aims to avert the imposition of a 25% tariff on auto exports, a key threat tied to the August 1 timeline. While Japanese officials have signaled flexibility, they remain adamant that any agreement must protect core economic sectors.
The EU is also working to secure a deal with Washington but is preparing retaliatory tariffs should talks collapse. The ongoing global brinkmanship has fueled geopolitical uncertainty and kept risk appetite in check.
Gold holds firm as traders eye geopolitical risks
Gold prices remained elevated on Tuesday, holding near a five-week high. Spot prices edged down slightly to $3,385 per ounce, but underlying support remains strong amid a backdrop of trade tension and geopolitical risk. With just over a week until the U.S. tariff deadline, investors are using gold as a hedge against volatility.
The threat of retaliatory moves by the EU, weak macro data in Asia, and the absence of a clear resolution on several global trade fronts continue to drive safe-haven flows. If trade negotiations falter, gold could see another leg higher, particularly if yields remain suppressed.
Fed under political spotlight as Bessent flags ‘mission creep’
In a separate development, Treasury Secretary Scott Bessent publicly criticized the Federal Reserve, accusing it of “significant mission creep.” In a post on X (formerly Twitter), Bessent called for a full review of the Fed’s $2.3 billion headquarters renovation and suggested the central bank has expanded too far into non-monetary activities.
The comments come as Fed Chair Jerome Powell prepares to speak at a regulatory conference later today. Though unlikely to address Bessent directly, Powell’s remarks will be closely watched for any defense of the Fed’s independence amid growing political pressure.
Markets digest technical extremes and precious metals rally
The Nasdaq 100 extended its remarkable technical streak, marking 61 consecutive sessions without closing below its 20-day moving average—the longest run since 1999. While most of the “Magnificent 7” tech stocks remain elevated, Apple stands out as the only one still trading below its 200-day average.
Meanwhile, platinum surged to its highest level in over 11 years, catching up with broader gains across industrial and precious metals. Traders attribute the move to tightening supply and increased investor interest as a potential hedge against inflation and geopolitical turmoil.
