Following a meeting between former U.S. President Donald Trump and Russian President Vladimir Putin that ended without any negative outcomes, follow-up talks at the White House involving European Union leaders, Ukrainian President Volodymyr Zelenskyy, Trump, and NATO (North Atlantic Treaty Organization) Secretary General Mark Rutte were seen as slightly positive amid ongoing diplomatic engagement.
Discussions included U.S. security guarantees and NATO’s Article 5 collective defense clause, though no breakthroughs were achieved. Overall sentiment surrounding a Ukraine-Russia peace deal remains cautiously optimistic.
Reports indicate that Putin is demanding to retain control of seized Ukrainian territories and is unlikely to accept firm U.S. security guarantees. In response, the White House said the European Union would assume most of the defense and security guarantee responsibilities, while the U.S. would offer limited assurances and provide military equipment. A potential trilateral summit between the U.S., the European Union, and Russia remains under consideration, though there is no confirmation yet. Similarly, expectations for a cease-fire remain low until a broader agreement is reached.
Zelenskyy emphasized the need for lasting peace, welcomed U.S. involvement in providing security guarantees, confirmed major arms purchases from the U.S., and expressed readiness to negotiate with Putin—while firmly rejecting any surrender of Ukrainian territory. NATO Secretary General Rutte called the day in Washington a success, while German Chancellor Friedrich Merz described the Ukraine discussions as decisive. European Commission President Ursula von der Leyen highlighted allied unity and the importance of strong security guarantees for Ukraine.
Trump stated, “We will try to work out a trilateral with the U.S., Ukraine, and Russia,” adding that he aims to stop the war, not extend it. On another topic, he warned that the remaining hostages will only return after Hamas is destroyed, sparking renewed concerns of further conflict.
U.S. Secretary of State Marco Rubio told Fox News that the U.S. would work with both European and non-European allies to build a credible security framework for Ukraine.
The Kremlin also confirmed that the Trump-Putin call centered on Ukraine and ongoing cooperation.
Elsewhere, credit rating agency Standard & Poor’s (S&P) affirmed the U.S. sovereign credit rating at AA+/A-1+ with a stable outlook, noting steady but elevated deficits. S&P also projected that U.S. real Gross Domestic Product (GDP) growth would slow to 1.7 percent in 2025 and 1.6 percent in 2026, before rebounding to 2.0 percent.
On the domestic front, the National Association of Home Builders (NAHB) Housing Market Index fell to 32 from 34, tying the third-lowest level since 2012—only seen before in April 2020 and December 2022.
In Japan, Prime Minister Shigeru Ishiba called for an immediate cease-fire and a fair peace in response to the U.S.-Ukraine meeting. Meanwhile, Taro Kono, former Minister for Digital Transformation (2022–2024) and a key member of Japan’s ruling Liberal Democratic Party (LDP), urged the Bank of Japan (BOJ) to begin raising interest rates early. I
In Australia, the Westpac-Melbourne Institute Consumer Sentiment Index rose by 5.7 percent to 98.5—the highest in three and a half years, nearing positive territory.
Separately, the U.S. National Hurricane Center reported that Hurricane Erin is moving northwestward to the east of the Bahamas.
Against this backdrop, the U.S. Dollar Index (DXY) recovered on Monday but remained unstable on Tuesday. It should be noted that a cautious mood ahead of the annual Jackson Hole Symposium event of the global central bankers restricts the market mood, in addition to the mixed geopolitical and data signals.
Gold posted mild early gains but lacked clear direction. Crude oil gave up a bounce from an 11-week low. Cryptocurrency markets declined for a second straight day, weighed down by heavy liquidation of leveraged long positions and ongoing technical breakdowns.
EURUSD and GBPUSD attempted to recover from a weak Monday, while the Japanese yen strengthened, pulling back USDJPY after its strong rally on Monday, driven by rising expectations of a BOJ rate hike. AUDUSD stayed under pressure, while USDCAD and NZDUSD saw moderate gains at the time of reporting. Meanwhile, Asia-Pacific equity markets edged lower following a mixed session on Wall Street.
EURUSD and GBPUSD started the key week with significant losses before bouncing back on Tuesday. This happened as U.S. Dollar bulls paused amid cautious optimism about the Ukraine-Russia situation and ahead of the Jackson Hole event. The weaker Eurozone trade balance likely added extra pressure on EURUSD. Meanwhile, GBPUSD had no major catalysts, as traders awaited UK inflation data and guidance from Jackson Hole for clearer direction.
Even though broad U.S. Dollar strength on Monday boosted USD/JPY, the pair came under pressure on Tuesday after a weekly loss. Traders are anticipating a Bank of Japan (BoJ) rate hike in 2025, despite most policymakers remaining data-dependent. Comments from key Japanese figure Taro Kono also supported calls for rate increases. At the same time, mixed Japanese data and political uncertainties in Tokyo create challenges for USDJPY sellers. With a light economic calendar and a cautious mood ahead of key events this week—such as the Federal Open Market Committee (FOMC) Minutes, Jackson Hole symposium, and August Purchasing Managers’ Index (PMI) reports—traders remain watchful.
AUDUSD and USDCAD portray the weakness against the U.S. Dollar, but the NZDUSD recovers as traders prepare for Wednesday’s RBNZ rate cut. Still, broad geopolitical jitters and a cautious mood ahead of this week’s key data weigh on the Antipodeans. That said, AUDUSD ignored the heaviest consumer sentiment jump in 3.5 years. On the other hand, the USDCAD’s upside could be linked to softer crude oil prices, Canada’s key export and positioning for today’s Canada inflation and this week’s U.S. catalysts, amid the US-Canada trade jitters and dovish BoC bias.
Gold remains cautious, supported by its 50-day Exponential Moving Average (EMA), which limits further decline. However, its usual safe-haven appeal is weak, likely due to a stronger U.S. Dollar and cautious optimism around the Ukraine-Russia peace talks, as well as expectations of lower demand from China.
Meanwhile, fears from Hurricane Erin have not helped crude oil buyers, as oil stays under pressure near its lowest level since June 2. This may be due to hopes for increased Russian oil supplies and positive outlooks from the Ukraine-Russia deal. As a result, crude oil prices ignore supply risks from the Middle East and OPEC’s firm view that energy demand will remain steady in 2025, despite market concerns over tariffs and weaker demand from China.
Bitcoin (BTC) and Ethereum (ETH) fell for a second straight day, despite continued institutional buying. The decline appears driven by heavy liquidation of long positions in leveraged markets, combined with broader market caution ahead of this week’s key events. Technical breakdowns have also added pressure to BTCUSD and ETHUSD.
Unlike Monday, Tuesday’s economic calendar includes Canada’s inflation data, U.S. housing figures, and weekly crude oil inventory data from the American Petroleum Institute (API), offering fresh momentum for traders. Also in focus are earnings from Home Depot—scheduled to release pre-market—which carries an 8% weight in the Dow Jones and could influence broader market sentiment. However, the main catalysts remain anticipation around the Jackson Hole symposium and developments in the Russia-Ukraine peace talks, all leading up to Wednesday’s Federal Open Market Committee (FOMC) Minutes, Thursday’s August Purchasing Managers’ Index (PMI) reports from major economies, and Friday’s speech by Federal Reserve Chair Jerome Powell.
In this environment, the market’s cautious tone may allow USD/JPY sellers to retain control, even if the U.S. Dollar stays firm. This could, in turn, weigh on commodities and major currencies. Antipodean pairs may continue to struggle, and cryptocurrencies could see further pullback, extending their retreat from strong July gains.
May the trading luck be with you!
