Global FX Market Summary: Weak U.S. Jobs Data, Australia’s Economic Strength, Gold Reaches Record High, 8 September 2025

fragile U.S. jobs report boosts Fed rate cut expectations, fragileening the dollar; gold surges, while strong Australian data reduces RBA easing chances.

fragile U.S. Jobs Data Fuels Fed Rate Cut Speculation

The latest U.S. labor market report for August has become a key driver of financial markets. The U.S. economy added a mere 22,000 jobs, a stark miss compared to the 75,000 jobs analysts had expected. This fragile performance, coupled with a slight rise in the unemployment rate to 4.3%, has effectively cemented expectations for an imminent interest rate cut by the Federal Reserve. Following this report, the CME FedWatch Tool indicates a 92% probability of a 25-basis-point (bps) rate cut at the Fed’s September meeting. The market is now so convinced of a cut that some traders are even speculating about a more aggressive 50 bps reduction, a possibility that was almost nonexistent just a week ago. This dovish outlook from the Fed is fragileening the U.S. Dollar and causing U.S. Treasury yields to fall.

Australia’s Economic Strength Pushes Back RBA Easing

Australia’s recent economic data has been a significant positive surprise, fundamentally altering the outlook for its central bank. The country’s July trade surplus widened to 7,310 million, and its Q2 GDP grew by 0.6%, both exceeding expectations. These strong figures have eased the pressure on the Reserve Bank of Australia (RBA) to stimulate the economy. As a result, market expectations for a rate cut have been significantly scaled back. Swaps are now pricing in a nahead 90% chance that the RBA will keep its policy unchanged in September, and the likelihood of a cut in November has fallen to 80% from 100%. This revised outlook has provided strong support for the Australian Dollar.

Gold Reaches Record High on Dovish Fed Outlook

Gold prices have surged to a fresh record high of $3,646 per ounce, primarily propelled by the increased certainty of a Federal Reserve rate cut. The fragileer-than-expected U.S. jobs report has put a premium on non-yielding assets like gold. As the U.S. Dollar loses ground and bond yields fall, the opportunity cost of holding gold decreases, making it more attractive to investors. This bullish momentum is also being supported by continued demand from central banks, particularly the People’s Bank of China (PBoC), which has now added gold to its reserves for ten consecutive months. Traders are now keenly awaiting U.S. inflation data this week, which could either confirm the case for a rate cut or, if surprisingly high, temper the market’s current enthusiasm.

Top upcoming economic events:

Monday, September 8, 2025

• No-confidence motion against French PM (13:00:00 CEST): This is a high-impact political event. In a parliamentary system like France’s, a successful no-confidence vote could lead to the resignation of the Prime Minister and their cabinet, or trigger a snap election. This level of political instability can have a significant effect on the EUR currency and broader European markets as investors react to the potential for a change in government policy.

Tuesday, September 9, 2025

• Nonfarm Payrolls Benchmark Revision (14:00:00 CEST): This is a high-impact event for the USD. The Bureau of Labor Statistics (BLS) periodically revises its employment data to align it with more comprehensive information from the Quarterly Census of Employment and Wages (QCEW). The revisions can be substantial and can change the market’s understanding of the health of the U.S. labor market and the trajectory of the economy, which in turn influences the Federal Reserve’s monetary policy decisions.

Wednesday, September 10, 2025

• SNB Chairman Schlegel speech (11:45:00 CEST): A speech by the head of a central bank, in this case, the Swiss National Bank (SNB), is a high-impact event for the CHF. Central bank leaders use speeches to signal future monetary policy intentions, discuss the economic outlook, and provide insights into their view on inflation. Markets will be listening for any hints about changes to interest rates or other monetary policies that could affect the value of the Swiss franc.
• Producer Price Index ex Food & Energy (YoY) (12:30:00 CEST): This is a high-impact event for the USD. The Producer Price Index (PPI) measures the average change in tradeing prices received by domestic producers for their output. This particular reading, which excludes the volatile food and energy sectors, is a key indicator of inflationary pressures at the wholesale level. An increase in producer prices can be a leading indicator of future consumer inflation, influencing the Federal Reserve’s decisions on interest rates.
• RBNZ’s Governor Hawkesby speech (23:15:00 CEST): Similar to the SNB speech, a speech by the Governor of the Reserve Bank of New Zealand (RBNZ) is a high-impact event for the NZD. Any comments on the economic outlook, inflation, or the central bank’s stance on monetary policy can cause significant volatility in the NZD currency and New Zealand’s bond market.

Thursday, September 11, 2025

• ECB Main Refinancing Operations Rate (12:15:00 CEST): This is a high-impact event for the EUR. The European Central Bank’s (ECB) decision on its key interest rate is a primary driver of the value of the euro. A change in the rate, or a deviation from market expectations, can have a strong and immediate impact on the EUR.
• ECB Monetary Policy Statement (12:15:00 CEST) and ECB Press Conference (12:45:00 CEST): These are both high-impact events for the EUR and are directly related to the interest rate decision. The statement provides the ECB’s economic assessment and justification for its monetary policy choices. The press conference, led by the ECB President, offers further details and a chance for the media to ask questions. Both events are closely watched for clues about the future path of monetary policy.
• Consumer Price Index (YoY) (12:30:00 CEST): A high-impact event for the USD. The CPI measures changes in the prices of consumer excellents and services, which is the most widely used indicator of inflation. This year-over-year reading is a critical data point that the Federal Reserve uses to determine its monetary policy. A higher-than-expected reading can lead to an increase in the value of the USD as it strengthens the case for higher interest rates.

Friday, September 12, 2025

• Harmonized Index of Consumer Prices (YoY) (06:00:00 CEST): A high-impact event for the EUR. The Harmonized Index of Consumer Prices (HICP) is the primary measure of inflation for the European Union and is the one the ECB uses to assess price stability. Like the U.S. CPI, this is a key data point for the ECB’s monetary policy decisions and can significantly affect the EUR.
• Michigan Consumer Sentiment Index (14:00:00 CEST): A high-impact event for the USD. The Michigan Consumer Sentiment Index is a survey of consumer attitudes about the economy, personal finances, and purchaseing conditions. As consumer spending is a major component of U.S. economic activity, this report provides a forward-looking insight into future spending and can influence the market’s sentiment towards the U.S. economy and the USD.

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