The US dollar continues to ignore the rate cuts expected by the market following the September 17 FOMC meeting. At the same time, gold prices have soared to a new all-time high. What is happening, and what should investors expect?

Let's start with the stock markets, primarily in the United States. Here, in the first two days of September, we observed negative dynamics amid renewed concerns that Donald Trump's tariff policy is not achieving its intended results—primarily with respect to China and India, who simply ignored the US president's threats to raise import tariffs. Market participants are beginning to see these countries as key economic challenges for the US, which could undermine the entire structure of the current tariff policy aimed at, in reality, "robbing" those countries that submitted to America, all for the sake of reinforcing Washington's global hegemony.

In addition, negativity surrounded the antitrust case against Google and Alphabet, also weighing on investor appetite for stocks. However, the court's decision turned out to be unexpected. It did not force the company to sell its Chrome browser, but it introduced other requirements that could still undermine the tech giant's position in the future. The market reacted to this news with the company's stock price surging up to 7% after the market closed.

On this wave of optimism, S&P 500 and NASDAQ 100 futures have been rising, already improving investor sentiment in Europe.

Against this backdrop, the US dollar continues to hold steady against major currencies. The ICE index has confidently remained in a relatively tight range of 97.50–98.65 for a month now.

What is supporting it, given the high probability that the Fed will cut rates at its next meeting?

It can be observed that the weakness of economies whose currencies are tied to the dollar is contributing to the perceived "strength" of the dollar. Recent events have demonstrated how Trump was able to compel countries within the Western bloc of the global economy, including Japan, to make significant economic concessions to the United States. These concessions include customs tariffs and commitments to invest enormous financial resources in the American economy.

On this wave, even a Fed rate cut—which is already largely priced in—may not significantly damage the dollar on the Forex market.

And what about gold?

The yellow metal is surging in value because, on one hand, it is supported by the expected Fed rate cuts, and on the other hand, by mounting panic in the West about the economic and political alliance of Russia, China, and India. These anxieties are seen as risks of a new global conflict, sustaining gold's status as a safe-haven asset.

What can we expect in the markets today?

I believe that the strength of the dollar will be limited. Anticipated weak labor market reports from ADP and the US Department of Labor will exert pressure on it. Gold could also pause in its rally, while equities may rise on the back of the news regarding Google and Alphabet.

Looking at the overall market picture, I view it as moderately positive.

Forecast of the Day:

EUR/USD

The pair is trading within a range of 1.1580–1.1735. It may decline locally, and then, amid weak US labor market news, reverse upward and head toward 1.1735. The 1.1590 level could serve as a buy level.

USD/JPY

The pair is in a sideways trend and may also reverse downward and move toward 147.00. The 148.62 level could serve as a sell level.