US dollar index lowers under pressure, Milan "probably" taking office before the Fed meeting in September

On September 2, early trading in the Asian market on Tuesday, Beijing time, the US dollar index hovered around 98.14. On Monday, the dollar index fell under pressure and finally closed down 0.17% to 97.68 as markets stakes on the Fed's interest rate cuts were rising and concerns about its independence increased. Spot gold rose for the fifth consecutive trading day, and once approached the $3490 mark during the session, hitting a new high since April 22, and finally closed up 0.82%, closing at $3476.39/ounce; spot silver rose even harder, breaking through the $40 mark for the first time since September 2011, and finally closed up 2.36%, at $40.68/ounce. As the situation in Russia and Ukraine tightens again, traders are closely watching Russia's energy supply, and international crude oil rises. WTI crude oil finally closed up 2.24% at $65/barrel; Brent crude oil finally closed up 1.04% at $68.03/barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovered at US$97.72. Currently, the market expects that the probability of the Federal Reserve cutting interest rates by 25 basis points this month is 90%, and the cumulative interest rate cut by 2026 will reach 100 basis points. The downside risks faced by the US dollar continue to become the focus of the market. This week's economic calendar contains a number of important data, including Job Vacancy and Labor Movement Survey (JOLTS), Automated Data Processing zgykf.cnpany (ADP) private sector employment data, and the highly-watched non-farm employment report on Friday. Analysts believe that if the labor market continues to be weak, it will support the Fed's dovish stance. Societe Generale CroweShbad said that if the recent economic weakness is proven to be the real situation, the Fed may take more radical policy responses. Technically, if the US dollar index successfully closes below the 97.50 level, it will move towards its nearest support level, which is in the 97.10–97.30 range.

Euro: As of press time, the euro/dollar hovers around 1.1705. EUR/USD rose more than 0.20% on Monday, as U.S. financial markets closed due to Labor Day holidays during a thin liquid trading session. The soft dollar and growing bets on the Fed's interest rate cut at its September meeting boosted the euro's appeal. Technically, the EUR/USD is trying to close above resistance at 1.1685–1.1700. If this attempt is successful, the EUR/USD will move towards the next resistance level 1.1785–1.1800.

GBP: As of press time, GBP/USD is hovering around 1.3539. The US dollar index continued to fall below 98.00 and approached the late July low, with risk appetite slightly rebounding, and the pound received momentum support. This week, the U.S. is data-intensive and the labor market will be the focus. The employment and wage sub-items within the week are regarded by the market as the key to testing inflation stickiness, while the expectation of "two rate cuts this year" is still slowly heating up in pricing, with interest rates falling at the front end of the curve, and the US dollar as a denominated asset passively weakening. Technically, breaking through the 1.3550 level will open the road to the test resistance level 1.3580–1.3600.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Tuesday, gold hovered around 3480.11. Gold rose above $3,450 and could challenge the $3,500 record on Monday as the U.S. market remained calm during Labor Day. Concerns about Fed independence and ongoing uncertainty in the trade war have kept gold down and increased capital flowing to the precious metals industry.

Technical: Gold resumed its upward trend, with gold hitting a two-month high of $3,489, and then fell back to $3,476. Although the Relative Strength Index (RSI) is close to the 70 threshold, the current trend intensity indicates that the most significant overbought situation is expected to approach the 80 level. Given the current situation, if the buying momentum continues, gold can rise above $3,500. Once it breaks through, the next resistance is $3,550and $3,600. Conversely, if gold/USD falls below the June 16 high of $3,452 (currently as support), it may move towards the July 23 high of $3,438. A further decline could bring the price to $3,400.

2) Analysis of crude oil market trends

On Tuesday, crude oil trading around 64.47. WTI fell slightly amid concerns that US President Donald Trump will double the existing 25% tariff on India's exports. Traders are ready for weekly crude oil inventories to be announced late Tuesday.

Technical: Crude oil chips are distributed multi-modal, with signs of upward accumulation. If the upper edge of the chip dense area is not broken, it is the key to the continuation of bulls. Otherwise, it may return to the 63.93-64.36 range, oscillate.

Forex market trading reminder on September 2, 2025

①17:00Eurozone August CPI annual rate initial value

②17:00Eurozone August CPI monthly rate initial value

③21:45Eurozone August S&P Global Manufacturing PMI final value

④22:00Eurozone August ISM Manufacturing PMI

⑤22:00Eurozone July construction expenditure monthly rate

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