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The dollar advanced Friday on solid economic data but remained on track for its biggest weekly drop in a month ahead of crucial Fed and BOJ meetings. Here's where key markets stand. USD: Weekly Drop Despite Friday Gains The dollar advanced Friday, bolstered by solid economic data suggesting the Fed could take its time resuming interest rate cuts, while tariff negotiations showed more clarity that eased market uncertainty. However, the greenback is set for its biggest weekly drop in a month.

The dollar advanced Friday on solid economic data but remained on track for its biggest weekly drop in a month ahead of crucial Fed and BOJ meetings. Here's where key markets stand. USD: Weekly Drop Despite Friday Gains The dollar advanced Friday, bolstered by solid economic data suggesting the Fed could take its time resuming interest rate cuts, while tariff negotiations showed more clarity that eased market uncertainty. However, the greenback is set for its biggest weekly drop in a month. "The dollar regained some ground the past two days, after being on the defensive earlier in the week... supported mostly by an encouraging set of U.S. economic data that argues for continued patience at the Fed," notes Elias Haddad at Brown Brothers Harriman. Trump made notable comments about dollar policy Friday, saying he liked a strong dollar but "you make a hell of a lot more money" with a weaker one. "When we have a strong dollar... you don't do any tourism. You can't sell tractors, you can't sell trucks, you can't sell anything," Trump said, highlighting his preference for export competitiveness. The dollar index is still down roughly 10% over the six months Trump has been in office. EUR: Finding Support at 1.1700 The euro traded higher last week after finding lasting support around the 1.1700 level. Traders now expect a bullish continuation toward 1.1800 in the coming week as the single currency benefits from ECB hints that rate cuts may be done. European government bond yields are up sharply on signs of a U.S.-EU trade deal and ECB policy pivots, contrasting with falling gilt yields and supporting euro strength. GBP: Short-Term Weakness at Four-Month Euro Low The pound lost strength against the dollar last week, trading back into the 1.3400 zone and falling 0.4% to $1.3456 Friday. Sterling dropped to its weakest level against the euro in four months as soft British data contrasted with higher European yields. However, traders see this as a short-term move with expectations of a fresh rally that could challenge 1.3750. The divergence stems from BoE rate cut expectations following weak UK business activity data showing employers cut jobs at the fastest pace in five months. British retail sales for June came in slightly below expectations, adding to the dovish BoE narrative. As MUFG's Derek Halpenny notes, "The jobs data is the most important aspect... as rate setters at the Bank of England are most focused on the labour market." JPY: Steady Ahead of BOJ Decision Both the Fed and Bank of Japan are expected to hold rates steady at next week's policy meetings, but traders are focusing on subsequent comments to gauge timing of next moves. The yen remains relatively stable as markets await policy guidance. GBPJPY: Range-Bound with Downside Risk The pound-yen remains within the range of 198.00-200.00 with weakness showing. Traders expect to see a move toward 196.00 if the 200.00 level is not broken next week, reflecting both pound weakness and yen resilience. GOLD: Range Trading Before Potential Breakout Gold continues trading well within the 3330 level. Traders enjoy this short-term range with most expecting this to be the final pullback to 3330 before a possible break toward 3500. The precious metal maintains its appeal amid policy uncertainty. BITCOIN: Correction Mode After Friday Drop Bitcoin had a huge drop Friday, trading well below the 115,000 level before making a quick pullback to close above $117,000. Traders still expect more correction in the time ahead, but for now Bitcoin remains in a short-term range as the crypto market digests recent volatility. Week Ahead: Central Bank Focus Next week's Fed and BOJ meetings will dominate market attention, with traders parsing every word for policy clues. The contrast between Trump's weak dollar preferences and Fed data dependency creates an interesting dynamic. Watch for any shifts in central bank communication that could accelerate the current policy divergence themes driving currency markets. Smart Traders Are Stacking Tools This Weekend ⚡ The setup everyone's talking about: MagniZone for zone identification Layered Option Alert for precise entries 21 option wins out of 25 trades. Plus zone signals that hit 8/10 times. While others guess, you execute with precision. Weekend acquisition mode: Upgrade your entire approach. [Join the smart money → GAIN ACCESS Regards, FindBetterTrades Trading Strategy Guides © 2025 – Unsubscribe