Oluwole Olawepo
The U.S. dollar remains under pressure as global markets enter September with caution. Weak U.S. payrolls data, just 22,000 jobs added in August, with unemployment climbing to 4.3% has reinforced expectations for a September Federal Reserve rate cut, with futures pricing in an 85–90% probability. This dovish pivot has driven Treasury yields lower, weakened the dollar, and fueled record-breaking safe-haven flows into gold and silver. Gold has surged past $3,500/oz, up more than 35% year-to-date, while silver has cleared $40/oz for the first time since 2011.
Equities remain near record highs but show selective leadership, with small caps outperforming amid thin volumes. Bonds are rallying on dovish expectations despite heavy sovereign issuance, and oil remains range-bound as markets await OPEC+ supply guidance. Meanwhile, central banks are diversifying aggressively away from U.S. Treasuries, accelerating demand for gold and alternative assets.
The week ahead is critical: U.S. CPI, non-farm payrolls, and the ECB’s policy decision will determine whether the dollar’s decline deepens or stabilizes, shaping September’s volatility outlook.
Market Overview
Equities
U.S. equity markets traded cautiously heading into the Labor Day holiday, with thin volumes prevailing. Both the S&P 500 and Dow briefly touched record highs earlier in the week before easing back, while small-cap stocks continued to outperform. The Russell 2000’s relative strength highlights selective risk-taking even as broader sentiment remains muted amid policy uncertainty and geopolitical tensions.
Bonds
Fixed-income markets are rallying as futures imply an 85–90% probability of a September Fed rate cut. This dovish repricing drove Treasury yields lower, most notably at the front end, reviving discussions around the long-dormant 60/40 portfolio mix. Although sovereign debt issuance from major economies continues to weigh on sentiment, demand for government bonds remains resilient given the macro backdrop.
Commodities
Gold remains the standout: spot prices recently pushed past $3,500/oz, up more than 35% year-to-date, as investors pile into safe-haven assets amid political risk and questions over Fed independence. Silver has surged above $40/oz for the first time in more than a decade. Oil markets, by contrast, are range-bound: Brent hovers near $67–68 and WTI near $63–65 as traders await the upcoming OPEC+ meeting for supply guidance.
Key Themes Driving FX
Fed Rate-Cut Expectations & Political Risk
Markets are increasingly convinced of a September Fed rate cut, with implied probabilities in the mid-80s to 90% range following the weak jobs data. The Dollar Index slipped nearly 1% on the release, while the dollar fell broadly against the euro, yen, and Swiss franc. Spot gold spiked over 1% on the same day, touching fresh highs above $3,580/oz. Political pressures have compounded the move: President Trump’s public attempt to remove Fed Governor Lisa Cook has stirred fears over central bank independence. Concerns about the Fed’s credibility is pushing investors toward alternative safe havens, with some analysts cautioning that under extreme stress scenarios, gold could climb toward $5,000/oz.
Reserve Diversification Intensifies
A structural pivot is underway in global reserves. Central banks are now holding more gold than U.S. Treasuries for the first time since the mid-1990s. Official sector gold purchases are on track to exceed 1,000 metric tons this year, underscoring a historic reallocation away from dollar assets. BRICS members and others are accelerating de-dollarization, increasingly using yuan, rubles, and gold to settle trade while reducing exposure to U.S. debt.
Safe-Haven & Real Asset Flows
Investors are reallocating aggressively into real assets. Gold’s year-to-date gain of more than 35% has been matched by silver’s breakout, which crossed $40/oz for the first time since 2011. This wave of demand spans institutional inflows and retail buying, reflecting distrust in fiat-based stability. Commodity-linked currencies such as the Australian and Canadian dollars are benefiting from the shift, supported by positive perceptions of resource-backed economies.
Macro Insight / News to Watch
This week’s macro calendar will be decisive for FX markets as traders seek clarity on Fed direction, inflation dynamics, and global central bank tone.
ECB Decision (Wednesday): The European Central Bank will announce policy and hold a press conference. Traders will scrutinize Christine Lagarde’s comments for signs of future easing or concern over fiscal fragility in Europe.
U.S. Inflation (Thursday): CPI and core CPI for August will be released. A core increase near 0.3% is expected, with tariff pass-through pressures still in play. The reading will directly shape Fed policy expectations.
Consumer Sentiment (Friday): The University of Michigan’s preliminary September sentiment survey will provide insight into household inflation perceptions and underlying demand.
Non-Farm Payrolls (Friday): After August’s disappointing 22,000 jobs gain, markets are on edge. Another weak print would cement expectations for easing, while a surprise rebound could complicate dovish bets.
Geopolitics: Political turbulence in France, the UK, and Norway continues to simmer. While not immediate market drivers, these risks feed into the broader volatility backdrop.
Why These Events Matter
The dollar’s trajectory hinges on the interplay between U.S. inflation, labour market signals, and policy credibility. A soft CPI and weak payrolls would confirm a September cut and potentially extend the dollar’s slide. By contrast, stronger data could stabilize the greenback and temper gold’s momentum. The ECB’s stance will influence whether the euro diverges from U.S. rate paths or stays aligned, shaping EUR/USD flows. Meanwhile, geopolitical noise sustains safe-haven demand, ensuring gold and the yen remain central hedges. For traders, these cross-currents mean September will likely be defined by volatility spikes around data releases, making timing and risk management more critical than directional conviction.
Psychology Corner – The Journal Edge
No Journal, No Edge: The Hidden Habit of Winning Traders
When Trading Turns Chaotic
Most traders can relate: multiple charts open, entries that seemed logical but collapsed, and the nagging thought, where did I go wrong? I used to feel the same. My trades were scattered, my notes inconsistent, and any profits felt accidental rather than reproducible. The turning point came when I discovered a powerful tool—the structured trading journal.
Why Disorder Creeps In
Lack of consistency rarely comes from a weak strategy; it’s often from a weak process. Chaos usually shows up through:
Emotional impulses: acting on hunches without evidence.
No reliable record: trying to rely on memory instead of data.
Unseen repetition: failing to catch recurring errors or strengths.
Building Your Journal System
A trading journal isn’t busywork, it’s the foundation of growth. Here’s how to use it:
Log every trade: entry, exit, size, setup, and market conditions.
Review weekly: identify repeating successes and mistakes.
Refine systematically: adjust rules from evidence, not emotions.
Track mindset: score discipline and confidence alongside results.
Wisdom to Remember
“Discipline is remembering your bigger goal.” – David Campbell
“A plan is worthless if you can’t measure your actions against it.” – Veteran Trader
The Takeaway
Trading chaos isn’t inevitable. With a journal, randomness gives way to structure, structure breeds discipline, and discipline leads to consistent results. Your journal isn’t paperwork—it’s the blueprint to sustainable profits.
Closing Summary
This week ends with the U.S. dollar weakening, gold hitting record highs, and markets bracing for pivotal policy data. Equities remain near highs, bonds rally on dovish expectations, and commodities show a split between safe-haven gains and range-bound oil. Attention now turns to U.S. inflation, payrolls, and the ECB’s stance, which will shape the dollar’s trajectory. Traders should focus on disciplined positioning, monitoring volatility spikes, central bank signals, and safe-haven flows as September unfolds.