Apollo economist warns: AI bubble now bigger than 1990s tech mania
Strong NFP Data Put Downward Pressure on Gold
Yesterday’s US nonfarm payroll (NFP) data showed that the labour market remains resilient, putting downward pressure on Gold (XAU/USD).
In June, companies created more jobs than expected, and the unemployment rate unexpectedly dropped towards 4.1%. The overall report was better than expected, reducing expectations of an imminent Federal Reserve (Fed) rate cut, which could weigh on gold prices in the short term.
Gold began to recover during the Asian session due to concerns about the US budget deficit. On Thursday, the House of Representatives approved US President Donald Trump’s massive tax-cut and spending bill, which is expected to add more than $3 trillion to the country’s budget deficit over the next decade.
Tariff pressure remains: Trump will begin sending letters to countries on Friday outlining the tariff rates they will face when exporting goods to the US These factors increase the appeal of gold as a safe-haven asset.
Euro Drops Sharply After Strong NFP Data
The euro (EUR/USD) fell against the US dollar (USD) on Thursday following the release of June nonfarm payroll (NFP) data. EUR/USD fell by around 0.45%, reaching 1.17440.
Investors focused on Thursday’s NFP report, released during a shortened week ahead of US Independence Day on Friday. The report showed why the Federal Reserve (Fed) isn’t hurrying to reduce borrowing costs. The data showed more jobs than expected were added in June, with the unemployment rate falling towards around 4.1%. However, average hourly earnings remained steady. Overall, the data dampened investors’ hopes of an imminent rate cut.
Despite strong domestic data, a new massive bill proposed by US President Donald Trump exerted pressure on the US dollar. The package is expected to increase the country’s budget deficit by over $3 trillion over the next decade. This pushed EUR/USD higher, with the pair rebounding by 0.58% after news that the House of Representatives passed Trump’s bill.
Today, President Trump will begin sending letters to countries indicating the tariff rates they will face when importing into the US High tariffs could further support EUR/USD’s rise.
Bitcoin Resumes Growth Amid ETF Inflows and Trump’s Support
Over the past two days, Bitcoin (BTC) has shown a steady recovery, climbing above $110,000. Several factors have contributed to BTC/USD’s rise: institutional inflows into cryptocurrency exchange-traded funds (ETFs), positive statements from US President Donald Trump, and easing regulatory pressure.
One of the key drivers of this rise was a sharp increase in investor interest in Bitcoin ETFs. Inflows in recent weeks have reached around $11 billion, with total investments approaching $50 billion. This has supported BTC as an asset class comparable to digital gold.
The additional bullish impetus came from the political arena. In his statements, Donald Trump confirmed his support for the cryptocurrency market. His statements had a positive impact on not only BTC price but also on shares of companies related to the crypto industry, such as MicroStrategy (NASDAQ:MSTR) and Coinbase (NASDAQ:COIN).
Despite the uptrend, data from the futures markets show an increase in the volume of short positions, with open interest rising from $32 billion towards $35 billion. This may indicate possible volatility and the risk of correction, especially if BTC/USD breaks below key resistance levels.