Fed Rate Cut Debate: Is 50bp on the Table for EUR/USD & Gold?

EUR/USD and GBP/USD are gaining momentum as markets increasingly price in the possibility of a 50 basis point Federal Reserve rate cut in September. The dollar index has weakened 0.4% as traders reassess Fed policy expectations following softer inflation data and cooling labor market conditions. EUR/USD has pushed above 1.0950, testing key resistance at 1.1000, while GBP/USD approaches 1.2800. Gold prices have surged 1.2% to $2,425/oz, benefiting from the weaker dollar and lower real yield expectations. Fed fund futures now show a 35% probability of a 50bp cut, up from 20% last week. Technical indicators suggest further dollar weakness if EUR/USD breaks above 1.1000 decisively. The shift in rate cut expectations could accelerate dollar selling pressure, particularly if upcoming US economic data continues to disappoint.