Global FX Market Summary: The Impact Of US Trade Policy And Tariffs , Economic Data And Market Expectations 8 August 2025

US tariffs, central bank shifts, and economic data spark dollar volatility, gold rally, and market uncertainty amid global trade tensions.

The Impact of US Trade Policy and Tariffs

US trade policy, particularly President Trump’s use of tariffs, is a central theme with widespread effects on global markets. The US government imposed a 25% tariff on Indian imports, a move attributed to India’s continued purchase of Russian oil. The US also threatened to impose a similar tariff on Chinese goods for the same reason. Furthermore, the US announced a 100% tariff on semiconductors and chips that are not manufactured domestically, and a new tariff on one-kilogram gold bars, which significantly impacts Switzerland, the world’s largest gold refining hub. These tariffs and threats have created economic uncertainty, contributing to a weaker US Dollar and renewed concerns about a potential global trade war, while also fueling a rally in the price of Gold.

Central Bank Monetary Policy and Leadership

The monetary policies of major central banks and potential changes in their leadership are a key factor influencing currency and asset values. The Bank of England (BoE) cut its policy rate by 25 basis points, but the decision was considered a “hawkish surprise” because the vote was a narrow 5-4 split and had to be repeated. This outcome led to a strengthening of the British Pound, which rose more than 0.6%. Meanwhile, the US Federal Reserve (Fed) is widely expected to resume its rate-cutting cycle, with traders pricing in a more than 90% chance of a cut in September, a sentiment driven by softening labor market data like the rise in jobless claims to 226,000. Speculation about who will replace Fed Chairman Jerome Powell is also affecting markets, as news that Christopher Waller, who favors lower interest rates, is a top candidate caused the US Dollar to strengthen.

Economic Data and Market Expectations

Economic data releases and the expectations surrounding them are a major driver of market movements. The weekly Initial Jobless Claims data in the US is a key focus, with a reading below 210,000 expected to support the US Dollar, and a reading above 230,000 potentially having the opposite effect. In Canada, markets anticipate moderate job growth and a slight increase in the unemployment rate to 7% in July. The Bank of Canada (BoC) is expected to maintain its current interest rates, as this data is not seen as significant enough to alter its wait-and-see stance. Furthermore, global trade data, such as China’s crude oil imports rising by 11.5% year-on-year and copper imports increasing by 9.1% year-on-year, indicates strong domestic demand for industrial metals despite the uncertain global trade environment.

Top upcoming economic events:

Monday, August 11, 2025

• Consumer Price Index (MoM) and (YoY) for EU
  • Dates: August 11, 2025 at 08:00:00
  • Importance: This report provides a look at inflation in the Eurozone. The “YoY” (year-over-year) figure, in particular, is a key metric for the European Central Bank (ECB) as it makes decisions on monetary policy. High or low readings can signal potential shifts in interest rates, which directly impact the value of the EUR.

Tuesday, August 12, 2025

• RBA Interest Rate Decision, Monetary Policy Statement, and Press Conference
  • Dates: August 12, 2025 at 04:30:00 and 05:30:00
  • Importance: The Reserve Bank of Australia (RBA) sets the official cash rate, which influences all other interest rates in the country. This decision, along with the accompanying statements and press conference, is a primary driver of the Australian Dollar (AUD). Any unexpected change in the rate or forward guidance can lead to significant market volatility.
• UK Employment Data (Claimant Count Change, Employment Change, and Unemployment Rate)
  • Dates: August 12, 2025 at 06:00:00
  • Importance: These are critical indicators of the UK’s economic health. A strong labor market with low unemployment and rising wages can lead the Bank of England (BoE) to tighten monetary policy. Conversely, a weak report could suggest the need for stimulus. These figures have a direct impact on the British Pound (GBP).
• US Consumer Price Index (CPI) (MoM) and (YoY)
  • Dates: August 12, 2025 at 12:30:00
  • Importance: As the primary measure of inflation in the US, this report is arguably the most watched economic release of the week. The “YoY” and “Core” figures are especially important to the Federal Reserve (Fed) when it evaluates future interest rate decisions. A higher-than-expected CPI can increase the likelihood of rate hikes, strengthening the USD, while a lower reading can have the opposite effect.

Wednesday, August 13, 2025

• Harmonized Index of Consumer Prices (HICP) for Germany (YoY)
  • Dates: August 13, 2025 at 06:00:00
  • Importance: Germany is the largest economy in the Eurozone. As such, its HICP data is a key component of the overall Eurozone inflation picture. It provides a strong indication of inflationary pressures within the bloc and is closely watched by the ECB and EUR traders.

Thursday, August 14, 2025

• Australia Employment Change and Unemployment Rate
  • Dates: August 14, 2025 at 01:30:00
  • Importance: Following the RBA’s interest rate decision earlier in the week, this employment data provides crucial context. A strong jobs report could support the RBA’s policy stance and strengthen the AUD, while a weak report could cast doubt on the RBA’s outlook.
• UK Gross Domestic Product (GDP) (QoQ) and (YoY)
  • Dates: August 14, 2025 at 06:00:00
  • Importance: GDP is the broadest measure of economic activity and is a key indicator of the UK’s economic growth. Unexpectedly strong or weak growth can significantly impact the British Pound (GBP) as it influences the Bank of England’s future policy decisions.
• US Producer Price Index (PPI) (YoY)
  • Dates: August 14, 2025 at 12:30:00
  • Importance: The PPI measures inflation at the wholesale level. It is seen as a leading indicator of consumer inflation (CPI), as producers’ costs often get passed on to consumers. Therefore, a higher-than-expected PPI can foreshadow higher CPI readings and potentially lead to a stronger USD.
• Japan Gross Domestic Product (GDP) (QoQ)
  • Dates: August 14, 2025 at 23:50:00
  • Importance: Japan’s GDP report is a vital measure of its economic health. Given the country’s ongoing struggle with deflation, this release is important for understanding the overall strength of the economy and can influence the Bank of Japan’s (BoJ) monetary policy, impacting the Japanese Yen (JPY).

Friday, August 15, 2025

• China Industrial Production (YoY) and Retail Sales (YoY)
  • Dates: August 15, 2025 at 02:00:00
  • Importance: These are key indicators of the health of the world’s second-largest economy. Industrial Production measures output from factories, while Retail Sales measure consumer spending. These reports provide insight into the global economic outlook and can affect the value of the Chinese Yuan (CNY) and other related currencies.
• US Retail Sales (MoM) and Michigan Consumer Sentiment Index
  • Dates: August 15, 2025 at 12:30:00 and 14:00:00
  • Importance: This is a powerful end to the week’s news. Retail sales are a direct measure of consumer spending, a significant driver of the US economy. The Michigan Consumer Sentiment Index gauges how confident consumers are about the economy. Both of these are crucial for the Fed’s economic analysis and can cause significant movement in the USD.

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