Market Summary (Aug 21, 2025)

We remain focused on three key themes. First, a very dovish RBNZ decision—with two officials voting for a 50 bp cut—has shifted our bias against the New Zealand dollar, leaving NZD crosses vulnerable. Second, gold’s daily bullish-engulfing pattern and wedge break signal upside, but two looming catalysts—a likely hawkish turn from Powell at Jackson Hole and any real progress in Ukraine–Russia peace talks—could prompt sharp pullbacks even as medium-term fundamentals (central-bank demand, ETF inflows) remain constructive. Third, mixed U.S. data—rising jobless claims alongside a stronger-than-expected flash manufacturing PMI—has complicated the Fed outlook. In FX, diverging central-bank paths and UK stagflationary pressures support EUR/GBP strength, while relative rate differentials and hedge-flow dynamics point to further USD/JPY weakness.