Today, Friday, August 22, 2025, financial markets are experiencing significant volatility with great anticipation for Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Forum. Here's a blog-style report focusing on the most important events and trends in US and European stock indices, the euro/dollar exchange rate, the US dollar/gold exchange rate, and their current economic impact.
US markets
US markets
- US stock indices experienced a clear sell-off on Thursday, August 21, with the Dow Jones Industrial Average falling 152 points, while the S&P 500 and Nasdaq also declined due to profit-taking in the technology and financial sectors.
- This was reflected in expectations for an interest rate cut in September; following the release of the strong PMI data, the probability of a rate cut decreased to only about 25%, supporting a more hawkish outlook from the Federal Reserve.
European markets
- In Europe, stocks moved mixed. The FTSE 100 index rose slightly by 21 points, while the DAX and CAC 40 indexes showed slight positive movements.
- Of particular interest is the developments in Powell's speech, which may determine the direction of global monetary policy in the coming period.
US Dollar - Euro - Gold
- The US dollar regained strength, driven by strong economic data and fading expectations of a rate cut. The dollar index (DXY) stabilized around 98.60.
- Conversely, the euro fell against the dollar, with selling pressure on the EUR/USD pair ahead of Powell's speech, as markets await his signals.
- Gold, meanwhile, saw a slight decline, touching its lowest levels in several weeks, due to a stronger dollar and reduced risk ahead of the upcoming Federal Reserve meeting.
Additional impactful developments
- Rising political and financial tensions: In the United States, the crisis between President Trump and the central bank escalated, with Trump calling for the resignation of Federal Reserve Governor Lisa Cook and attacking Federal Reserve Chairman Jay Powell, heightening uncertainty about the independence of monetary policy.
- Growing interest in emerging markets: Due to weak confidence in developed markets and political and financial pressures, investor flows have shifted significantly toward emerging market instruments and stocks, which offer better returns and more dynamic economies.
- European Commission seeks digital currencies: In response to the challenges posed by dollar-backed stablecoins, the European Commission is accelerating its efforts to issue a digital euro via blockchain technology, in an effort to protect European financial and monetary sovereignty.
