U.S. President Donald Trump shook global markets on Wednesday and carried the momentum into Thursday with fresh tariff measures and political plans. He pushed Russia toward a peace deal with Ukraine but distanced himself from Israel’s plan to take full control of Gaza, warning it could cause more bloodshed, even as humanitarian aid just resumed in the region. Trump also continued criticizing North Korea and Iran’s nuclear ambitions, while indirectly warning Russia.
Despite these tensions, the U.S. Dollar weakened and Wall Street closed higher, led by technology stocks. Apple Inc. surged after its products received a tariff exemption on exports of its products from India to the U.S., following Apple’s announcement of a $100 billion investment in addition to its earlier $500 billion commitment. Similarly, Taiwan secured exemptions on U.S. tariffs for chips and semiconductors, boosting tech shares and lifting Asian markets. This came despite Trump doubling tariffs on Indian goods from 25% to 50% in response to India’s continued oil imports from Russia.
On the monetary policy front, dovish comments from Minneapolis Fed President Neel Kashkari, San Francisco Fed President Mary Daly, Boston Fed President Susan Collins, and Federal Reserve Governor Lisa D. Cook eased risk-off sentiment. Their tone, along with weak U.S. employment and activity data, strengthened market expectations for a 0.25% interest rate cut in September, with two more cuts expected in 2025. However, Federal Reserve Chair Jerome Powell maintained that future actions would remain data-dependent, as he reiterated in his post-FOMC press conference.
In trade news, Trump said he plans to lift some tariffs on China and Japan, though official confirmation and specific conditions are still pending. U.S. Secretary of State Marco Rubio downplayed risks of further tariffs on China but did not address Japan. Meanwhile, White House National Economic Council Director Kevin Hassett noted that Russia views India as a “release valve” for exporting its goods, particularly amid Western sanctions.
Trump also stated he would meet with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy next week, but the White House has yet to confirm whether it will be an in-person meeting or a virtual call.
On the energy front, U.S. weekly crude oil inventories showed a draw larger than expected, but this failed to boost oil prices. Geopolitical supply risks were outweighed by demand concerns and rising output from OPEC+. Separately, Saudi Arabia raised its oil prices for Asia, hoping to benefit from higher Indian demand and rising U.S. tariffs.
In economic data, Australia’s trade surplus improved in June, while China’s July exports (in U.S. dollar terms) rose 7.2% year-on-year, beating the 5.4% forecast.
Amid all this, the U.S. Dollar Index (DXY) remains under pressure, hitting a one-week low after ending a two-day winning streak. This allowed major currencies and Antipodeans (AUD, NZD) to rise despite global trade and political risks. Commodities traded mixed, while equities and bond yields edged higher. Cryptocurrencies, however, saw mild losses, staying within their weekly ranges, as they struggled to benefit from the softer dollar or the Trump administration’s supportive tone toward the sector.
The U.S. Dollar's weakness, along with strong Eurozone Retail Sales and talk of Trump possibly halving EU tariffs (from 30% to 15%) if certain conditions are met, supported EURUSD, keeping the pair higher for a third straight day near the week’s top.
Meanwhile, USDJPY remains under pressure after recent losses, though downside momentum is slowing. The pair fails to benefit from the weaker USD due to Japan’s political tensions and concerns over potential new U.S. tariffs on Tokyo. Additionally, mixed expectations around the Bank of Japan's (BoJ) rate hike and the Federal Reserve’s potential rate cuts, combined with upbeat June readings for Japan’s Coincident Index and Leading Economic Index, weigh on the pair—though market jitters limit further downside.
GBPUSD rose for the fifth straight day, hitting a one-week high, even as there are no major developments on the U.S.-UK trade deal and the Bank of England (BoE) is widely expected to cut rates by 0.25% in today’s policy decision.
Traders appear braced for a dovish BoE, with downbeat economic projections likely in the “Super Thursday” release. Still, the weaker U.S. Dollar remains the primary driver behind the Pound’s strength, helping GBPUSD stay firm despite domestic uncertainties.
AUDUSD rose for the third straight day, reaching a weekly high, supported by a weaker U.S. Dollar, stronger-than-expected Australia trade data (June), and upbeat China trade figures (July).
NZDUSD also climbed for a second day, testing its weekly top, despite no major domestic data.
Meanwhile, USDCAD fell for the fifth consecutive session, shrugging off weaker crude oil prices, as the soft USD, hopes for a U.S.-Canada trade deal, and anticipation of Friday’s Canadian employment report kept the Canadian Dollar supported.
Gold holds modest gains within its weekly range, supported by a weaker U.S. Dollar, but struggles to rise further due to China demand concerns. The metal also fails to act as a strong safe haven, possibly because stocks and bond yields are climbing.
Meanwhile, WTI Crude Oil posts mild gains at its lowest level in two months, halting a five-day losing streak. The recovery comes as traders consolidate losses and monitor supply risks linked to Russia, Israel, Gaza, and Iran. However, Trump’s tariff-related demand fears and increased OPEC+ supply continue to weigh on prices. Notably, U.S. weekly crude inventories showed a surprise draw, but that wasn’t enough to lift oil prices meaningfully.
Bitcoin (BTC) and Ethereum (ETH) posted modest losses early Thursday, weighed down by broader market uncertainty, declining crypto ETF fund flows, and technical breakdowns, despite a weaker U.S. Dollar.
The drop comes even after supportive U.S. regulatory actions. On Wednesday, the U.S. Commodity Futures Trading Commission (CFTC) approved liquid staking and clarified it does not classify it as a security, boosting optimism among crypto-friendly firms—but not enough to lift prices amid risk-off sentiment.
After an active but data-light Wednesday, markets face a high-stakes Thursday. Key events include the Bank of England’s expected 0.25% rate cut, U.S. weekly jobless claims, and employment cost and wage data. Speeches from Fed officials and Canada’s Ivey PMI will also add to the mix.
Meanwhile, attention stays on geopolitical developments involving Russia, Ukraine, Israel, North Korea, India, and Iran, along with statements from Trump and the White House.
If risk appetite fades, the U.S. Dollar could rebound, pressuring GBPUSD, gold, and equities, while bond yields dip and crypto stays range-bound.
Overall, Thursday could be a turning point, with macro data and geopolitical risks likely to drive volatility across currencies, commodities, and risk assets.
May the trading luck be with you!
