Dollar Pressure Persists; Gold Gains, US–Ukraine Talks

The euro gained ground against the dollar on Friday, with EUR/USD ending the session 0.43% higher as traders largely shrugged off robust U.S. retail sales data and focused instead on monetary policy expectations and geopolitical developments.

The pair’s advance comes despite July U.S. retail sales matching forecasts with a 0.5% month-on-month increase, while June’s reading was revised upward to 0.9%. On a yearly basis, sales slowed to 3.9% from 4.4%. Industrial production, however, disappointed, contracting 0.1% in July after June’s 0.4% rise. Meanwhile, the University of Michigan’s Consumer Sentiment Index dropped to 58.6 in August from 61.7, well below expectations of 62.0, as inflation fears weighed on household confidence. Attention also turned to Anchorage, Alaska, where U.S. President Donald Trump and Russian President Vladimir Putin are holding a summit.

In Europe, investors are awaiting this week’s flash PMIs and inflation data from both the eurozone and Germany. Stronger readings could reinforce expectations that the European Central Bank will pause its easing cycle, a scenario that would likely bolster the common currency further.

Gold prices rebounded sharply early on Monday, recovering from a two-week low, as expectations of a September Federal Reserve rate cut pressured U.S. Treasury yields and lent support to the non-yielding metal.

Markets are increasingly convinced that the Fed will resume its easing cycle next month, with the CME FedWatch Tool pointing to the likelihood of at least two 25-basis-point cuts by year-end. The drop in bond yields has underpinned demand for bullion, though gains remain capped by a modest uptick in the U.S. dollar and a generally positive risk tone.

Attention is also turning to geopolitics. U.S. President Donald Trump is set to meet Ukrainian President Volodymyr Zelenskyy on Monday, followed by talks with European leaders on a possible peace agreement with Russia. The discussions could add volatility to safe-haven flows, with gold positioned to benefit if tensions persist.

On the data front, U.S. producer prices rose in July at the fastest pace since 2022, cooling expectations for a larger 50 bps Fed cut.

Looking ahead, investors will closely watch Wednesday’s release of the FOMC minutes and Fed Chair Jerome Powell’s speech at Jackson Hole for clarity on the central bank’s policy outlook. Gold is likely to remain sensitive to both monetary policy signals and geopolitical headlines in the coming days.

Oil prices were little changed in early Asian trading on Monday, stabilizing after a week of losses as concerns over Russian supply faded following last week’s U.S.–Russia summit.

Both benchmarks WTI Oil and Brent Oil fell nearly 1.5% on Friday, extending sharp weekly declines ahead of the Trump–Putin meeting.

At the summit in Alaska, U.S. President Donald Trump signaled a softer stance, expressing support for pursuing a full peace agreement in Ukraine rather than insisting on an immediate ceasefire. The shift reduced expectations of harsher sanctions on Moscow and eased fears of disruptions to Russian crude exports.

Trump also suggested he was in no rush to impose tariffs on nations such as China for continuing purchases of Russian oil, though he warned action could follow within weeks if peace talks stall. Meanwhile, the U.S. confirmed a 25% duty on Indian imports, effective August 27, in response to India’s ongoing Russian crude purchases.

Looking ahead, Trump is scheduled to meet Ukrainian President Volodymyr Zelenskyy and senior European leaders in Washington on Monday to advance discussions on a potential peace deal. While Trump promised “Big Progress on Russia” in a weekend post, analysts remain cautious, highlighting that Moscow continues to demand territorial concessions that Kyiv is unlikely to accept without firm Western security guarantees.

With the immediate threat of energy sanctions receding, analysts suggest that bearish fundamentals—such as slowing demand growth and ample supply—may once again dominate oil price direction in the near term.

The US 500 recorded its second consecutive weekly gain, even as it slipped on Friday under pressure from weaker consumer sentiment and rising inflation expectations.

The University of Michigan’s preliminary Consumer Sentiment survey for August showed a decline to 58.6 from 61.7 in July, missing expectations of 62, as households grappled with concerns over tariff-driven inflation. Inflation expectations rose, with the one-year outlook climbing to 4.9% and the five-year projection reaching 3.9%, slightly reducing the likelihood of a September Federal Reserve rate cut. Meanwhile, U.S. import prices rebounded 0.4% in July after a revised 0.1% decline in June, indicating that tariffs continue to push up consumer costs. Retail sales remained solid, rising 0.5% in July following an upwardly revised 0.9% gain in June, highlighting resilient household spending despite tariff pressures, although a softer labor market and higher goods prices could temper consumer demand in the third quarter.

U.S. President Donald Trump and Russian President Vladimir Putin held face-to-face talks in Alaska, marking their first meeting since Trump returned to the White House. Trump emphasized that he would not negotiate on behalf of Ukraine, leaving decisions on territorial swaps to Kyiv while aiming to bring both sides to the negotiation table.

Earnings season continues to support equities, with FactSet data showing that over 80% of S&P 500 companies have reported positive earnings-per-share (EPS) surprises, alongside strong revenue results.

UnitedHealth Group jumped after Berkshire Hathaway, led by Warren Buffett, disclosed a new investment in the healthcare insurer. Berkshire also trimmed stakes in Apple and Bank of America while increasing exposure to homebuilders, including DR Horton and Lennar.