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The dollar notched a second straight week of gains as U.S. economic data showed resilience, complicating the Fed's rate cut path while political pressure on Powell intensifies. Here's where key assets stand. USD: Economic Strength vs Political Pressure The dollar fell 0.21% to 149.48 against the yen Friday but remained on track for a second consecutive weekly gain. Stronger-than-expected consumer spending (0.6% vs 0.5% forecast) took the steam out of aggressive Fed cut pricing, pushing the gr

The dollar notched a second straight week of gains as U.S. economic data showed resilience, complicating the Fed's rate cut path while political pressure on Powell intensifies. Here's where key assets stand. USD: Economic Strength vs Political Pressure The dollar fell 0.21% to 149.48 against the yen Friday but remained on track for a second consecutive weekly gain. Stronger-than-expected consumer spending (0.6% vs 0.5% forecast) took the steam out of aggressive Fed cut pricing, pushing the greenback higher. "I think it's pretty clear that stronger economic data has taken the steam out of the pricing for Fed rate cuts and that's sort of narrowed the interest rate differential with other countries," notes John Velis at BNY. However, the bigger concern looms ahead. Daleep Singh at PGIM Fixed Income warns that Trump's pressure on the Fed is the "main near-term concern for the U.S. dollar." With Powell's mandate ending in May, "there's a very decent chance that the FOMC looks and acts quite differently." Trump's attempt to remove Fed Governor Lisa Cook and appointing Stephen Miran to the board have exacerbated worries the Fed could ease too aggressively. "We do worry quite a bit about an abruptly dovish shift in the Fed's reaction function going into next year," Singh added. EUR: Snapping Three-Week Rally The euro rose 0.31% to $1.1701 Friday but was on course to finish the week lower, snapping three straight weeks of gains. The EURO traded lower last week as the dollar gained momentum due to inflation risk and tariff data, plunging to lows at 1.16500 before making a Friday retracement. This could be another opportunity for sellers to engage once more as dollar strength persists on economic resilience. GBP: Complete Sell Level The pound traded significantly lower last week, trespassing into the 1.3300 levels - making it a complete sell zone. With price making a retracement, this could be the chance to enter a sell if price doesn't close above 1.3500 in the coming week. Sterling's weakness reflects both dollar strength and ongoing concerns about UK fiscal dynamics, creating a compelling technical setup for bears. GBPJPY: New Level Established The GBPJPY has traded well into the 200.00 level, closing out on this psychological barrier. Traders expect this could be a new level and price could rally from this point as the cross establishes support at this key area. This breakout and hold above 200 represents a significant technical achievement for bulls. The yen weakened against the dollar, on track for a fifth consecutive week of losses and trading near its highest level since August 1. The combination of stronger U.S. data and dovish BOJ positioning continues pressuring the Japanese currency. GOLD: Bullish Momentum Expected Gold traded lower last week but regained momentum, pushing back up to 3780 before dropping into 3760 to close the week. Traders anticipate the bullish momentum to continue in the coming week as concerns about Fed independence and economic uncertainty provide ongoing support. The precious metal continues to benefit from both safe-haven demand and lower real yield expectations. BITCOIN: Below $110K Support Bitcoin sank all the way below the $110,000 level, putting it in a bearish move for the short term. This support level could act as a booster for price to rally back to the top. However, a close below this level could see price trade all the way into $100,000. The cryptocurrency faces a critical juncture at this key support zone. Fed Rate Cut Expectations Cooling Traders are now pricing in an 89.8% chance of a 25 basis-point rate cut at the Fed's next meeting, down from nearly 92% probability a week ago. Richmond Fed's Barkin sees "limited risks of a big rise in either unemployment or inflation," while Vice-chair Bowman believes "decisive interest rate cuts are needed to ward off rising trouble in the job market." Week Ahead: Jobs Report Pivotal Bank of America analysts note: "USD solidly back in range but less risk of disorderly unwind of shorts, based on positioning. Pivotal jobs report ahead." The employment data will be crucial in determining whether the dollar's recent strength can persist or if economic softening will resume the downward trajectory seen earlier this year. Giving away free access to our scanner this weekend! If you want in on the action, Saturday and Sunday are yours. Full scanner features. Zero payment. Multi-market alerts delivered. Weekend special ends Monday. Get Saturday Access Regards, FindBetterTrades Trading Strategy Guides © 2025 – Unsubscribe