Asia Stocks Rally as Dollar Weakens, Gold Soars

Asia stocks rally as the dollar weakens and gold soars amid a dovish central bank outlook, safe-haven demand, and upbeat global tech sentiment.

Asian markets advanced on Thursday as investors digested soft Australian labor data and positioned for a more dovish Reserve Bank of Australia (RBA). The Australian dollar slid while the ASX 200 gained, as weaker employment figures strengthened expectations for further easing.

Elsewhere, gold and the Japanese yen drew renewed safe-haven demand amid lingering U.S.-China tensions and political uncertainty in Washington. Broader regional equities tracked Wall Street higher, with tech and semiconductor stocks leading gains across Japan, South Korea, and Taiwan following a robust rally in U.S. tech overnight.

Gold surged to a fresh record near $4,237/oz, underpinned by falling yields, persistent geopolitical risk, and continued weakness in the U.S. dollar, which extended its decline for a third consecutive day.

European & U.S. Outlook

The upbeat tone from Asia is expected to carry into the European open, though traders remain cautious ahead of key U.S. data later in the day. European equity futures point to a mixed start, with sentiment tempered by lingering trade tensions and energy policy uncertainty within the EU.

In the U.S., focus turns to the Philly Fed Manufacturing Index (12:30 p.m. GMT) and remarks from FOMC member Waller (1:00 p.m. GMT), both of which could influence short-term dollar volatility.

The U.S. Dollar Index (DXY) remains under pressure amid growing conviction that the Federal Reserve will maintain an easing bias through late October. The broader trend for the greenback remains bearish, with market participants pricing in slower U.S. growth, persistent political instability, and a data-dependent Fed stance following last month’s 25 basis-point rate cut to a 4.00%–4.25% target range.

Next 24 Hours Bias: Medium Bullish for DXY (short-term correction risk)

Gold (XAU/USD): New Record Highs Amid Global Uncertainty

Gold extended its rally to new historic highs, propelled by risk aversion, softer U.S. yields, and continued dollar weakness. Despite technical overbought signals, sentiment remains firmly bullish, supported by expectations of further Fed easing and safe-haven inflows amid global economic uncertainty.

Next 24 Hours Bias: Strong Bullish

Euro (EUR/USD): Eyes on Lagarde Speech Amid Trade Tensions

The euro faces mixed pressures ahead of ECB President Christine Lagarde’s 4:00 p.m. GMT remarks. European markets opened softer, weighed by renewed “trade war” rhetoric and profit-taking following recent gains.

The ECB remains on hold after maintaining key policy rates in September, projecting steady inflation near its 2% target and moderate growth of 1.1% for 2025. The euro’s near-term path hinges on Lagarde’s tone—any dovish tilt could reinforce mild downside momentum.

Next 24 Hours Bias: Medium Bearish

Swiss Franc (CHF): Stable but Supported by Haven Flows

The Swiss franc traded modestly weaker but retained safe-haven support amid ongoing global uncertainties. With no major domestic data due, CHF moves will largely follow broader risk sentiment and geopolitical developments. The SNB remains on hold after pausing rate cuts in September.

Next 24 Hours Bias: Weak Bearish

British Pound (GBP/USD): GDP in Focus as Market Balances Growth and Inflation Risks

Sterling steadied around 1.34 ahead of the latest U.K. GDP release (6:00 a.m. GMT). The pound’s direction will depend heavily on whether economic data confirms signs of stagnation or resilience. While a weaker U.S. dollar provides near-term support, persistent inflation and fiscal tightening risks weigh on sentiment.

Next 24 Hours Bias: Medium Bearish

Canadian Dollar (USD/CAD): Traders Await Macklem’s Remarks

The Canadian dollar held steady below 1.4050 amid subdued risk appetite and trade-related uncertainty. Investors are eyeing a speech from Bank of Canada Governor Tiff Macklem (5:30 p.m. GMT) for fresh policy cues after recent soft GDP data and lingering U.S. tariff headwinds.

Next 24 Hours Bias: Medium Bearish

Oil (Brent & WTI): Mild Rebound, But Outlook Remains Weak

Crude oil prices rebounded slightly, supported by geopolitical developments, including India’s reduction in Russian imports under U.S. pressure. However, oversupply concerns and slowing global demand continue to cap upside potential. Brent traded near $62.40, while WTI hovered around $58.86 per barrel, both up about 1% from recent lows.

Next 24 Hours Bias: Medium Bearish

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