Busy Week Ahead: Tech Earnings and US Jobs Data in Focus

EUR/USD extends its gains for a fifth consecutive session, holding near the mid-1.1500s and reaching its highest level since June 17 during Monday’s Asian session.

Lower crude oil prices have eased concerns over inflation and reduced expectations for aggressive Federal Reserve tightening, weighing on the USD. Hopes for a potential US-Iran agreement, alongside OPEC+’s decision to increase oil production in September, have further pressured oil prices and reduced demand for the safe-haven Dollar. The USD remains under pressure as markets reassess the outlook for US monetary policy and the sustainability of its recent recovery.

The Euro is also supported by resilient Eurozone inflation data, which has strengthened expectations that the European Central Bank could raise interest rates again in September. Meanwhile, further short-covering in the Japanese Yen has added to pressure on the USD.

Attention now turns to the latest US economic data, with the ISM Manufacturing PMI due later Monday, as traders look for fresh clues on the Federal Reserve’s policy outlook.

Gold (XAU/USD) advances around 0.5% to above $4,060 on Monday morning, extending its recovery as the softer US Dollar provides support to dollar-denominated bullion. However, gains remain limited as traders assess whether the recent rebound has enough momentum to develop into a broader recovery.

Gold also benefited from easing geopolitical concerns after US President Donald Trump said Iran and other Middle Eastern countries had requested additional time to finalize an agreement aimed at reopening the Strait of Hormuz and addressing Tehran’s nuclear program. The comments triggered a sharp decline in oil prices, with crude falling more than $5 per barrel in early Asian trading.

However, gains in gold remained limited by renewed concerns over the Federal Reserve’s policy outlook. Three Fed officials who dissented at last week’s meeting reiterated that inflation remains too high and supported an immediate rate increase, highlighting the uncertainty surrounding the central bank’s next move.

Attention now turns to a busy US data calendar, including JOLTS job openings, the ADP employment report, weekly jobless claims and Friday’s Nonfarm Payrolls, which could provide further direction for Gold.

Oil prices fell nearly 5% in Asian trading on Monday, reaching their lowest levels in three weeks as expectations of renewed US-Iran negotiations reduced concerns over further escalation and potential disruptions to regional energy supplies.

The decline followed US President Donald Trump’s decision to call off a planned military strike on Iran and announce that negotiations would resume on Monday. Talks are expected to focus on reopening the Strait of Hormuz and addressing Iran’s nuclear ambitions, easing fears of a wider conflict that could disrupt oil shipments across the region.

Oil prices had briefly climbed above $90 per barrel last week as the conflict expanded, with attacks targeting energy infrastructure and shipping routes in the Gulf and Red Sea.

Additional downward pressure came from OPEC+’s decision to increase production quotas by around 188,000 barrels per day from September, continuing the gradual unwinding of voluntary output cuts introduced in 2023. The move reinforced expectations of higher supply as geopolitical risks begin to ease.

Wall Street ended higher on Friday, supported by gains in consumer discretionary and chip stocks, while stronger Treasury yields and a sharp decline in Apple limited the advance.

Technology stocks were among the weakest performers during the month as the AI rally lost momentum. The Philadelphia Semiconductor Index fell 20.6% in July, marking its worst monthly performance since October 2008. Concerns over elevated valuations, heavy AI spending and uncertainty over the timing of returns weighed on semiconductor stocks.

Big Tech earnings provided some support toward the end of the month. Microsoft’s results and strong Azure cloud growth helped revive interest in the AI trade, while Amazon surged more than 15% after reporting a 37% increase in AWS sales. Apple, however, fell more than 7% after issuing a weaker-than-expected outlook for the September quarter.

US monetary policy also remained a key market focus. The Federal Reserve kept interest rates unchanged at its latest meeting, but three officials dissented in favor of a 25-basis-point rate increase, citing persistent inflation pressures. The comments pushed Treasury yields higher and added to concerns over the outlook for interest rates.