Our weekly market sentiment update lands at a pivotal moment for traders. The dollar dropped to a three-month low, gold surged past $4,600, and oil rallied on the back of escalating US-Iran tensions. Below is the full weekly market sentiment dashboard with directional ratings across all major instruments.
Strength Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | Weak bullish | Steady gains on dollar softness. |
| USD | Strong bearish | DXY at 3-month low near 98.8. |
| EUR | Strong bullish | EUR/USD above 1.16, best in months. |
| JPY | Weak bearish | Intervention fading, carry trade resumes. |
| AUD | Weak bullish | Risk-on bounce lifts Aussie to 0.7175. |
| NZD | Weak bullish | Tracking AUD higher on USD weakness. |
| CHF | Strong bullish | Safe-haven bid, USD/CHF below 0.80. |
| DXY | Strong bearish | 98.8, debt fears and buyback signal. |
| Indices | ||
| S&P 500 | Weak bearish | 7,674, down ~1.5% on the week. |
| Dow Jones | Weak bearish | 2nd straight weekly loss at 53,277. |
| Commodities | ||
| Gold (XAU) | Strong bullish | $4,604, 5th weekly gain, 3-month high. |
| Oil (Brent) | Strong bullish | Brent $94+, Iran sanctions lift crude. |
Geopolitical Spotlight
The US escalated economic pressure on Iran this week, with President Trump describing an upcoming sanctions package as an “economic D-Day.” Treasury Secretary Scott Bessent confirmed that details would be announced on Monday 25 August. The move aims to isolate Iran financially and could extend penalties to countries still trading with Tehran, including China.
The UAE suspended all trade and financial transactions with Iran in a significant blow to the regime. Meanwhile, Iran’s foreign ministry rejected the sanctions as “extraterritorial overreach.” Oil prices rose more than 5% for the second consecutive week as supply fears intensified around the Strait of Hormuz, where tanker traffic remains well below normal levels.
Separately, the Treasury Department doubled its long-dated bond buyback operations to at least $4 billion per issue, after 30-year yields hit their highest since 2007 above 5.33%. The relief rally was short-lived. By Friday, yields had rebounded close to pre-announcement levels.
Monday’s Iran sanctions announcement is the week’s first major catalyst. Traders should watch whether secondary sanctions target Chinese buyers of Iranian crude, which would be a significant escalation. The Jackson Hole symposium (27-29 Aug) is the other anchor, with Fed Chair Warsh delivering his first keynote on 28 Aug. Any hint of a September rate move will ripple across every asset class.
Forex Markets
The dollar had a rough week. The DXY slid to 98.8, a three-month low, pressured by fiscal concerns and the Treasury’s bond buyback announcement. The dollar fell 2.3% over the past month.
EUR was the standout performer, with EUR/USD climbing above 1.1680 for a gain of roughly 0.9% on the week. The ECB held rates at 2.25% in July and has signalled patience, which is keeping the euro supported relative to a weakening dollar.
GBP edged higher to 1.3648, tracking the broader dollar sell-off. JPY remains the most watched currency. The historic US-Japan intervention in early August jolted USD/JPY from 164 to 155, but the pair has drifted back to 159 as carry traders rebuilt positions. The intervention slowed speculation but has not changed the fundamentals.
AUD rose to 0.7175 and NZD to 0.5981, both benefiting from risk-on flows and dollar weakness. CHF strengthened sharply as a safe haven, with USD/CHF breaking below the 0.80 level for the first time since the Treasury buyback announcement.
Currencies to watch
EUR/USD has broken decisively above 1.1650 and is trading at its strongest in months. If dollar weakness persists into Jackson Hole, a test of the 1.1750 area is realistic. Watch for any hawkish Warsh comments that could stall the move.
USD/JPY is stuck between carry trade gravity pulling it higher and intervention risk capping rallies. A move above 160 could trigger fresh official action. The BoJ rate path remains the key variable.
USD/CHF broke below 0.80. The Swiss franc is absorbing safe-haven demand from both the Iran crisis and bond market volatility. The SNB’s next assessment on 24 September will be important.
The dollar’s direction next week hinges on two things: Monday’s Iran sanctions detail and Warsh’s Jackson Hole speech on Thursday. If sanctions target secondary buyers, expect further dollar weakness as markets price in higher oil and stickier inflation. Tokyo CPI on Friday (29 Aug) could also reignite yen volatility if it prints hot, putting the BoJ back in focus.
Indices
All three major US indices posted weekly losses despite a Friday bounce. The S&P 500 closed at 7,674.37, down roughly 1.5% on the week, snapping a three-week winning streak. The Nasdaq fell around 2%, dragged lower by a chip-led sell-off on Tuesday. The Dow dropped to 53,277, its second consecutive weekly decline and steepest fall since mid-March.
The bond market was the driver. The 30-year yield touched 5.33% on Tuesday, its highest since 2007, before the Treasury buyback announcement offered brief relief on Wednesday. By Thursday, yields had rebounded and stocks fell again. Friday’s recovery was supported by solid US business activity data, which showed growth at its fastest pace in over four years.
On the sector level, financials and materials outperformed, helped by a 22% weekly surge in bitcoin. Crypto-related stocks like Robinhood (+14%) and Coinbase (+8%) were notable gainers. Tesla rose 5.1% on Friday while Nvidia slipped 1%.
Yields are running the show. If the 10-year stays above 4.70% and the 30-year holds near 5.25%, equity upside will be limited. Consumer confidence data on Tuesday and the second GDP estimate on Thursday could shift sentiment. Warsh’s Jackson Hole speech is the week’s wildcard for rate expectations and equity direction.
Gold & Oil
Gold surged to $4,604 per ounce, hitting a three-month high and recording its fifth consecutive weekly gain, the longest streak since October 2025. Gold climbed nearly 5% on the week. The drivers were clear: a weakening dollar, rising fiscal concerns, and the Treasury’s expanded buyback program, which revived the “debasement trade” narrative. December gold futures hit $4,569, their highest since May.
Oil also rallied hard. Brent crude settled near $94.39 per barrel, up roughly 6% for the second straight week. The move was fuelled by Washington’s threat of sweeping new sanctions on Iran, uncertainty around Strait of Hormuz shipping, and disruptions to Russian refining capacity from Ukrainian strikes. US gas prices are now nearly a dollar higher than a year ago.
Gold’s momentum is strong, but a 15% rally is now facing its first major test. Watch the $4,500 support level and how gold reacts to the PCE inflation print on Friday. For oil, Monday’s sanctions detail is everything. If secondary sanctions hit Chinese buyers, Brent could push toward $100. If the language is softer than expected, a pullback to the low $90s is likely.
Week in Review
- Treasury doubled bond buybacks to $4B per operation, 30-year yields hit 19-year highs.
- US threatened “economic D-Day” sanctions on Iran. UAE cut all trade ties with Tehran.
- S&P 500, Nasdaq and Dow all posted weekly losses after a volatile bond-driven week.
- Gold hit $4,604 for its 5th straight weekly gain. Brent crude rose 6% to $94.
- DXY fell to 98.8, its lowest in three months, on fiscal and debasement concerns.
- Mon 25 Aug: Iran sanctions package details announced.
- Tue 25 Aug: CB Consumer Confidence (Aug), New Home Sales (Jul).
- Wed-Fri 27-29 Aug: Jackson Hole symposium. Warsh keynote Thu 28 Aug.
- Thu 28 Aug: US GDP second estimate (Q2), weekly jobless claims.
- Fri 29 Aug: US PCE Price Index (Jul), Japanese Tokyo CPI (Aug).
