Dollar Steady Ahead of Key US Inflation Data; Australian Dollar Holds as RBA Decision Looms

Economic

Forex

Summary:

The US dollar remained firm on Tuesday as markets awaited July’s CPI report, which could shape expectations for September Federal Reserve rate cuts....

Dollar Holds Gains on Cautious Positioning Before CPI

The US dollar index hovered at 98.497 in early Asian trading, holding its recent two-session gain of 0.5%. Traders are positioning cautiously ahead of July’s US core CPI release, expected to rise 0.3% month-on-month and lift the annual rate to 3%. A stronger-than-expected reading could challenge current market pricing, which assigns an 89% probability to a quarter-point Fed cut on September 17.

Analysts at TD Securities note that an upside CPI surprise could prompt a modest dollar bounce, as it may undermine expectations of a full September cut. Conversely, a downside surprise is unlikely to significantly shift Fed rate pricing unless accompanied by further labor market deterioration, which policymakers see as a more compelling catalyst for larger cuts.

Fed Policy Outlook and Tariff Impact Risks

Recent signals from the Fed have emphasized growing concerns over the labor market, with officials indicating openness to policy easing as early as September. However, if data suggest Trump’s tariffs are adding to price pressures, the Fed could opt to delay cutting rates. The market remains sensitive to the potential inflationary pass-through from trade policy, particularly amid ongoing tariff negotiations with China.

The dollar edged 0.1% higher to 148.28 yen, while the euro held steady at $1.1615. The Chinese yuan traded flat at 7.1935 per dollar offshore, with limited market reaction to Trump’s extension of the US-China tariff truce for another 90 days a widely anticipated move. The extension maintains a pause in sharply higher duties and is seen as buying time for a potential trade deal.

Negotiations continue against the backdrop of semiconductor export licensing arrangements, with Nvidia and AMD reportedly agreeing to remit 15% of China sales revenues to the US government to secure licenses.

Australian Dollar and RBA Outlook

The Australian dollar traded at $0.6518, little changed ahead of the RBA’s policy meeting. Markets largely expect a 25-basis-point cut, following weaker-than-expected Q2 inflation data and a 3½-year high in unemployment. The possibility of a surprise outcome is heightened by recent changes in the RBA’s decision-making framework, which caught traders off guard when rates were held steady last month.

Bitcoin was steady near $118,845 after Monday’s rally to $122,308.25, just shy of its record high from mid-July. Market sentiment across risk assets remains closely tied to the CPI print, which could influence both currency direction and broader risk appetite.

Source: Reuters

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Gerik

Economic

Tariff Truce Supports Regional Sentiment

The extension of the US-China tariff pause, confirmed Monday by both governments, removed the immediate threat of triple-digit duties on Chinese goods. While widely anticipated, the move reassured markets that the fragile status quo in trade relations remains intact. Shane Oliver, chief economist at AMP, noted that the decision carries “no immediate implications for investment markets,” but it does allow investors to focus on other macroeconomic drivers without the near-term risk of a tariff shock.

The tariff reprieve follows months of tit-for-tat duties that peaked earlier this year before talks in Geneva, London, and Stockholm rolled back the most extreme measures. The latest extension sustains a tariff environment of 30% on US imports from China and 10% on Chinese imports from the US, keeping trade channels open while broader negotiations continue.

Equity Market Performance Across Asia

Japan’s Nikkei 225 surged 2% to a record high as markets reopened after a holiday, propelled by strong performances in technology stocks and positive global equity trends. Australia’s benchmark index also reached an all-time peak ahead of the Reserve Bank of Australia’s policy meeting, where markets expect a 25-basis-point rate cut and possibly further easing later in the year.

MSCI’s broadest index of Asia-Pacific shares outside Japan posted modest gains, with Chinese blue chips flat and Hong Kong’s Hang Seng slipping 0.1% in early trading. Market ranges have been contained in recent weeks as traders weigh the possibility of a lasting US-China trade accord against the risk of a relapse into tariff escalation.

Macro Data and Central Bank Policy in Focus

Investor attention is now turning to a dense calendar of economic events. In the US, July’s core consumer price index (CPI) forecast to rise 0.3% month-on-month versus June’s 0.2% will be released later Tuesday. A softer-than-expected reading could lift small-cap equities, while a stronger print may temper expectations for Federal Reserve rate cuts. Current market pricing anticipates at least two Fed cuts in 2025, though J.P. Morgan projects four consecutive reductions beginning in September.

In Australia, the RBA is widely expected to cut rates today, with guidance on the pace and scope of future easing under close scrutiny. Oliver notes that the “uncertainties are around its guidance” on whether the central bank sees additional scope for cuts and the speed at which it might proceed.

Gold traded at $3,354 per ounce after falling 1.6% Monday when Trump confirmed tariffs would not be applied to imported gold bars. Oil prices were steady ahead of the August 15 meeting between Trump and Russian President Vladimir Putin, where discussions are aimed at ending the war in Ukraine. While the market is not expecting a breakthrough, analysts warn that any shift in geopolitical tone could marginally affect commodities and emerging market assets.

Source: Reuters

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MarketPulse by OANDA Group

Cryptocurrency

Forex

Economic

This weekend saw some explosive buying in digital assets, propulsed by Ethereum breaking above its previous highs.After touching $4,000, a cascade of Saturday buying took the second largest crypto to $4,350 highs.Ether is now consolidating around the $4,200 key handle – A consolidation at its highs is a more bullish sign, however for the Crypto Market to run higher, Participants will now look at the leading Crypto.

Bitcoin actually caught up to the ETH rally on Sunday evening and in a swift rally, touched $122,310, $900 shy of its all-time high record.The failure to breach new highs has brought some profit taking, prompting a BTC analysis to see if this top has the potential to be a longer-term top or if there is still the potential for new all-time highs.Cryptocurrencies have been getting a boost from growing doubts on the US Economy amid the imposition of the infamous Trump tariffs, and getting further support from accommodative US crypto policies.

A daily overlook on the Crypto Market

Bitcoin Rejects Test Of All-Time Highs, A Double Top In The Making?_1

Crypto Daily Performance, August 11, 2025 – Source: Finviz

Some relatively strong profit taking is happening on altcoins but this doesn’t seem to be as strong of a correction for Bitcoin and ETH which have been outshining their competitors.As long as both ETH and BTC hold their current highs, the market shouldn’t show any signs of concerns – but the relative strength of both relative to minor coins could be an interesting study for the upcoming cycle.

Bitcoin Multi-timeframe Technical Analysis

Bitcoin Daily Chart

Bitcoin Rejects Test Of All-Time Highs, A Double Top In The Making?_2

Bitcoin Daily Chart, August 11, 2025 – Source: TradingView

Looking at the daily picture, we see the Bitcoin establishing a range in the $113,000 to $120,000 range – Ranges close to the al-time highs are typically good signs for prolonged upward action.However, today and tomorrow’s daily candles will provide huge technical information on if a double top will emerge or not after the overnight session’s higher wick.As long as the lower bound of the range holds (further supported by the 110,000 to $112,00 support zone), Bitcoin still has a chance to mark new cycle all-time highs.

Bitcoin 4H Chart

Bitcoin Rejects Test Of All-Time Highs, A Double Top In The Making?_3

Bitcoin 4H Chart, August 11, 2025 – Source: TradingView

Looking closer, we see the most recent highs acting as a potential break-retest of the July upwards trendline.Rejecting below the $115,000 Support would confirm a break-retest which would point towards the beginning of a worst-case scenario for Bitcoin as this would come with a failed double top and would indicate that buyers haven’t had enough strength to even retest the previous ATH.This scenario is for now still a bit far, therefore the rest is to see if Bitcoin holds around the 119,000 to 120,000 Pivot zone – Consolidating here gives it more chance to retest the ATH and potentially break higher

Key levels of interest for Bitcoin:

Resistance levels:

● All-time Highs to break 123,150

● Most recent highs 122,300

● Major Resistance 121,000 to 122,000

● 126,500 to 128,000 Potential Resistance

Support levels:

● Immediate Pivot Between $115 ,000 to $116,500 (Confluence with 4H MA 50)

● $113,000 Mini Support and weekend lows

● Major Support Zone previous ATH 110,000 to 112,000

Bitcoin 1H Chart

Bitcoin Rejects Test Of All-Time Highs, A Double Top In The Making?_4

Bitcoin 1H Chart, August 11, 2025 – Source: TradingView

The action is still very balanced in the 1H Chart –

We spot more details of this morning’s selloff rejecting the July upward trendline on a break-retest technical pattern, but with the 1H RSI back to neutral, it will be essential to see where players take the prices.Tomorrow’s US CPI will have sure implications for the upcoming price action and participants may no want to move their pawns too much before.In the meantime, a cup and handle pattern is in the development. If buyers do trade on this technical setup, a measured-move rule of this pattern would point to $125,500 prices.

Source: OANDA

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Gerik

Economic

China–U.S. Trade War

Extension Avoids Immediate Escalation

On Monday, President Trump announced via Truth Social that he had signed an executive order to prolong the existing trade truce with China for another 90 days. The previous deadline, set for 12:01 a.m. Tuesday, would have triggered a US tariff hike from 30% to potentially higher levels and invited retaliatory measures from Beijing. China confirmed the extension through state media outlet Xinhua.

The pause has been welcomed by US businesses with significant operations in China. Sean Stein, president of the US-China Business Council, described it as “critical” for providing the negotiation space needed to improve market access, particularly in agriculture and energy, while giving companies greater certainty for medium- to long-term planning.

Recent History of Tariff Confrontations

The US-China tariff conflict reached extreme levels earlier in 2025, with duties spiking to 145% on Chinese goods and 125% on US exports, threatening to halt bilateral trade and triggering a steep financial market sell-off. A Geneva meeting in May de-escalated the crisis, lowering US tariffs to 30% and Chinese tariffs to 10%. This set the stage for ongoing negotiations and the June agreement in which the US eased export restrictions on chip technology and ethane in exchange for China loosening access to rare earths.

Analysts note that both sides have tested each other’s pain thresholds. Claire Reade, former assistant US trade representative for China affairs, said the US has recognized it does not hold the upper hand. China’s threat to restrict rare earth exports critical for industries from EVs to defense has proven a potent countermeasure. Ali Wyne of the International Crisis Group argued that Washington’s earlier overestimation of tariff leverage created self-inflicted constraints, giving Beijing reason to believe it can retain bargaining power in future talks by maintaining resource export threats.

Core Disputes Still Unsettled

While the truce buys time, it does not resolve longstanding US complaints about China’s industrial policies, state subsidies, and inadequate intellectual property protections. The US trade deficit with China, totaling $262 billion last year, underscores the imbalance Washington seeks to address. Observers such as Jeff Moon, former US diplomat and trade official, caution that while limited agreements such as commitments to purchase more soybeans, curb fentanyl-related chemical exports, and sustain rare earth shipments are possible, the deeper structural disagreements will likely ensure that the trade war “continues grinding ahead for years.”

Maintaining the 90-day pause preserves a fragile status quo, avoiding fresh shocks to supply chains and commodity markets. However, the absence of a comprehensive settlement means businesses must plan for ongoing tariff exposure and geopolitical volatility. Any future summit between Trump and Xi could produce incremental gains, but without breakthroughs on industrial subsidies and IP enforcement, the US-China trade relationship will remain prone to recurring friction.

Source: Reuters

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Samantha Luan

Forex

Political

Economic

The U.S. dollar held steady on Tuesday, with markets braced for a key consumer inflation report later in the day that could shape expectations for Federal Reserve interest rate cuts.The Australian dollar was steady hours before a policy decision by the Reserve Bank of Australia.The U.S. dollar index - which measures the currency against sixcounterparts, including the euro and yen - was steady at 98.497 as of 0046 GMT, after advancing 0.5% over the past two sessions.

Prior to that, the dollar had retreated as U.S. President Donald Trump's dovish-leaning pick to replace a Fed governor, and similarly inclined potential candidates for chairman, led traders to increase easing bets.In addition, Fed officials have sounded increasingly uneasy about the labour market, signalling their openness to a rate cut as soon as September.Cooling inflation could cement bets for a reduction next month, but if signs emerge that Trump's tariffs are fuelling price pressures, that might keep the central bank on hold for now.Traders currently put the odds of a quarter-point cut on September 17 at about 89%.

"Risk-reward heading into U.S. CPI this week is for a modest USD bounce as any upside surprise will challenge market pricing of almost a full cut by September," TD Securities strategists wrote in a research note."A downside surprise, on the other hand, is unlikely to move Fed pricing and the USD as much," they said."The reasoning is that for the Fed to consider an outsized cut of 50 basis points, the catalyst will be further deterioration in the labour market and not a downside CPI miss."

Economists polled by Reuters expect core CPI to have risen 0.3% in July, pushing the annual rate higher to 3%.The greenback rose 0.1% to 148.28 yen on Tuesday. The euro was flat at $1.1615.The dollar on Monday largely ignored Trump's signing an executive order extending a pause in sharply higher tariffs on Chinese imports for another 90 days, a move that some market participants said was expected.With the United States and China seeking to close a deal averting triple-digit import tariffs, a U.S. official told Reuters that chip makers Nvidia and AMD had agreed to allocate 15% of China sales revenues to the U.S. government, aiming to secure export licences for semiconductors.

The yuan was flat at 7.1935 per dollar in offshore trading.

The Aussie fetched $0.6518 , little changed from Monday with economists and investors widely expecting a quarter-point rate reduction from the RBA, after second-quarter inflation came in weaker than expected and the jobless rate hit a 3-1/2-year high.

Source: Yahoo Finance

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Oliver Scott

President Donald Trump named EJ Antoni, chief economist of the conservative Heritage Foundation, to lead the Bureau of Labor Statistics after firing the former head of the agency earlier this month.

Trump appointed Antoni, who has been vocal about his concerns with BLS jobs data and revisions, in a Truth Social post. The position is subject to Senate confirmation.

“Our Economy is booming, and E.J. will ensure that the Numbers released are HONEST and ACCURATE,” Trump wrote.

Antoni would succeed Erika McEntarfer, whom Trump abruptly fired Aug. 1 after a BLS report showed weak job growth in July and substantial downward revisions to the prior two months. He accused her, without evidence, of manipulating the numbers for political purposes, while noting that she was appointed by former President Joe Biden.

Trump’s firing of McEntarfer shocked economists across the political spectrum, who immediately came to her defense and BLS as an institution. The agency’s work, in addition to that of other US statistical offices, has a “gold standard” reputation globally for being free of political influence — a status which many now fear is at risk.

BLS routinely revises its data in an effort to make it more accurate in the long run. But the latest revisions, which trimmed 258,000 jobs from May and June, were particularly eye-catching — marking the largest downward adjustment since the pandemic.

Steve Bannon, a senior adviser to Trump in his first term and an influential voice in conservative circles, had pushed Antoni for the role, calling him “the perfect guy at the perfect time to run the BLS.”

Antoni came on Bannon’s podcast shortly after the latest jobs report was released, where he was asked if there was a “MAGA Republican” in charge of BLS. Antoni responded, “No, unfortunately.”

Antoni added that the absence of a Trump pick running the agency is “part of the reason why we continue to have all of these different data problems.” He contributed to the Project 2025 policy rubric, which, in part, called for maximizing hiring of political appointees at the Labor Department, which oversees BLS.

The economist is also a senior fellow at Unleash Prosperity, a group that counts Steve Forbes, Arthur Laffer and Stephen Moore among its leaders and is one of the entities regularly bringing policy ideas to Trump. Antoni has a Ph.D. in economics.

Source: Yahoo Finance

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Samantha Luan

Economic

Commodity

Political

Forex

One of China’s biggest copper fabricators is set to reap a windfall from President Donald Trump’s efforts to boost US production of the metal.Zhejiang Hailiang Co., a major manufacturer of copper tubes used in autos, airconditioning and plumbing, might seem an unlikely winner from “America First” protectionism. But its stock has jumped nearly 20% since the Trump administration imposed tariffs at the end of July on imports valued at more than $15 billion last year.

While Washington and Beijing joust over trade, investors have zeroed in on Hailiang’s footprint in the US. The company said in 2020 it’s aiming for 100,000 tons of annual capacity at its plant in Houston. The factory had 30,000 tons as of last year. In an emailed response to questions, Hailiang said last week the expansion is proceeding, without elaborating.The firm’s shares have outperformed other Chinese copper producers, as well as the broader CSI 300 Index, which has fallen slightly over the period. Hailiang’s total annual capacity is around 1.5 million tons.

The 50% duty on semi-finished copper, which will disrupt sales to the US while putting a premium on metal fashioned locally, may only be the first step in a Trump-led realignment of the global copper industry. The White House also ordered officials to come up with a plan in 90 days to slap tariffs on an array of other copper-intensive goods.The US imported at least 600,000 tons of semi-finished copper last year. That’s nearly a third of its total demand, according to Citic Securities Co. As those imports become more costly, Hailiang’s US factory is expected to deliver “exceptional profits,” the brokerage said in a note.

The plant in Houston is part of a network that also includes bases in Indonesia and Morocco. Although China is the world’s biggest market for copper, the company has expanded internationally to hedge against a slowing economy at home and the risks posed by trade hostilities with western countries.The effort may now be about to pay off after an earlier stumble. The Houston plant suffered a net loss of 35 million yuan ($4.9 million) last year due to higher labor and material costs, and expenses related to its expansion, according to Hailiang’s earnings report. That was a weight on companywide net income, which dropped 37% to 703 million yuan.

The company could also benefit from its proposed acquisition of a domestic peer. It said in December it planned to buy an undisclosed stake in Golden Dragon Precise Copper Tube Group, which also has a copper tube plant in Pine Hill, Alabama.Beijing’s campaign to end deflation helped spur positive feedback in markets from equities to commodity prices. Still, strategists at Citigroup aren’t convinced that it’s time to chase the stock rally.President Donald Trump’s direct request for China to quadruple its soybean orders is a reminder of the perilous state of 2025-2026 US exports, according to Bloomberg Intelligence.Even as the green hydrogen boom fizzles globally, a handful of projects in Asia are keeping alive hopes that the technology may someday help decarbonize polluting industries.