* Dollar hits lowest since end-July ahead of US jobs data

* Gold trades near record high on rate cut bets, silver at 14-year high

* S&P 500 clocks fourth monthly gain amid 35% surge since April’s meltdown

* US appeals court deem Trump’s tariffs as illegal, USD edges lower

FX: USD fell for a fifth day in a row and below the 50-day SMA at 98.00. The Dollar Index made a five-week low though retraced some losses through the day. The Labour Day holiday in the US meant reduced volumes. It’s a busy week of US jobs data culminating with NFP on Friday. After Fed Chair Powell’s Jackson Hole pivot, markets have baked in a 25bps rate cut in a few week times, so the bar is high not to cut. Meantime, Friday’s federal appeals court ruling Trump’s universal tariffs legal adds to the uncertainty around wider policy making.

EUR ticked up for a third day and above its 50-day SMA at 1.1664. Focus is on today’s eurozone inflation data, which is expected to remain around target though countrywide figures have been divergent. The weekend saw ECB doves cautioning against any complacency around risks that inflation undershoots again.

GBP pushed higher as bulls target mid-August highs just below 1.36. There is not much on the UK data calendar this week. But we do get to hear from some MPC members who are likely to repeat their hawkish stance as per the prior BoE meeting. The government, who is in a tight fiscal corner, might also reveal their Autumn Budget date, which could harm sterling into the autumn.

JPY traded around the 50-day SMA which is acting as support at 147.00. There was underperformance in Japanese stocks alongside the backdrop of trade uncertainty, as it was recently revealed that Japan’s top trade negotiator had postponed his trip to the US last week due to issues regarding rice purchases.

AUD outperformed again as it moved higher for a fifth straight day. We last saw that win streak when the aussie appreciated for seven consecutive days after April “Liberation Day”. Risk sentiment was mixed along with Chinese PMI data.

US stocks: The US Labour Day holiday saw markets closed.

Asian stocks: Futures are mixed. Regional markets were muted amid tariff uncertainty on the US Appeals court ruling. The US also revoked waivers for Intel, Samsung and SK Hynix to use US tech in their China operations.  The ASX 200 fell with gold and defensive strength offset by tech weakness. The Nikkei 225 fell below 42,000 intraday with tech losses also hitting the index. The Hang Seng and Shanghai Composite both bucked the regional mood with the former surging on the back of a double-digit Alibaba rally post-earnings.  But mixed PMI data saw the mainland index lag.

Gold jumped again, up now for five days in a row, which was last seen in February. See below for more detail. Silver was also strong, as it hit a 14-year high.

Day Ahead – Eurozone CPI, US ISM Manufacturing

Expectations are for EZ HICP Flash to print unchanged for a third month at 2.0%, with the core forecast one-tenth lower at 2.2%. Unhelpful energy base effects could push the headline a tick higher to 2.1%. On the flip side is a stabilisation in food price inflation following the increase seen in 2025. The prior release showed the services component nudged lower to 3.2% from 3.3% and this steady disinflation might continue, with the stronger euro also helping. German inflation printed moderately stronger than expected but French and Italian were softer. The ECB could be on hold for this year, with around a one in three chance of a rate cut.

US ISM August manufacturing activity is expected to tick up to 48.8 from 48.0 as firms slowly come to terms with tariffs. Factory conditions continue to improve but the survey is still in contractionary territory as cost pressures and geopolitical uncertainties linger, especially around supply chains and international trade. Employment indices will be watched ahead of the major jobs report on Friday.

Chart of the Day – Gold close to record highs

Bullion prices have broken to the upside after tracking sideways around the 50-day SMA, now at $3,352. Last week saw growing noise surrounding potential secondary sanctions on buyers of Russian oil and gas, which provided further support to the market. The Fed’s favoured inflation gauge, US core PCE came in line with expectations, cementing bets that the Fed will cut interest rates at its 16-17 September meeting.

Of course, much will depend on Friday’s jobs report for August. Another weak reading would reinforce the view that a September rate cut is a done deal, and bolster bugs as lowering funding costs are good for non-yielding gold. Questions around the Fed’s independence will also linger, even if we get an upside surprise in NFP. The record high is at $3,500 and the downward trendline from that top comes in around $3,400 so may now act as initial support.