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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: The US dollar has once again hit a low of more than three years, pay attention to employment data." Hope it will be helpful to you! The original content is as follows:
On the Asian session on Tuesday, the US dollar index hovered around 96.72. This week's US economic data attracted much attention from the market, especially the June non-farm employment report to be released on Thursday. According to a Reuters survey, economists expect 110,000 new jobs to be created in June, down from 139,000 in May, and the unemployment rate may rise slightly from 4.2% to 4.3%. These data will provide key clues to assessing the health of the U.S. labor market and directly impact the Federal Reserve's monetary policy path. In addition, major central banks around the world (Feder Chairman Powell, European Central Bank President Lagarde, Bank of England Governor Bailey, Bank of Japan Governor Kazuo Ueda, and Bank of Korea Governor Lee Changyong) held a group meeting; the European Central Bank held a central bank forum in Sintra.
U.S. dollar: As of press time, the US dollar index hovered around 96.72. As the U.S. stock index performed strongly in the second quarter of 2025, setting a record high, market sentiment remained positive. As a result, the US dollar (USD) approached a multi-year low as markets expected a substantial increase in fiscal deficits and market participants expected the Federal Reserve to relax more than 50 basis points (bps), pushing the euro to a four-year high. Technically, at the daily level, the US dollar index moving average system is short-selling: 50-day (99.2861), 100-day (101.6780) and 200-day moving average (103.8683) form layer-by-layer suppression. Although the MACD indicator is in the negative range (DIFF-0.5780, DEA-0.4894), the bar chart narrowed to -0.1771, indicating that the action energy is slightly weakened in the short term. RSI (14) is 33.4343, close to oversold area, need to be alertBeware of the risk of technical rebound.
Powell's Congressional testimony was interpreted by the market last week as a clear dovish signal. It stated that "if summer inflation does not rebound due to tariff remarks, it will be appropriate to cut interest rates", which directly promoted the shift in interest rate futures pricing. However, Francesco Pesole, strategist at Dutch International, pointed out that the market may be overpriced and loose expectations: "If non-farm employment only slows down moderately, coupled with the possible rebound in inflation in the www.wzhdjgj.coming months, it will force investors to pull back some of the bets on interest rate cuts." London Stock Exchange Group data shows that it is currently down in July.The probability of interest rates is only 21%, indicating that the market is more inclined to wait for action in September.
Fed Bostic reiterated on Monday that he still expects the Fed to lower interest rates once this year, and pointed out that the Fed still has time to consider the latest data before deciding to take action. Bostic said he expects a rate cut in 2025, "My position is still there", noting that he expects three rates next year. "I think we are actually patient to keep interest rates unchanged for the time being, because the labor market is actually quite stable."
The German Federal Statistics Office said on Monday that consumer prices rose 2% year-on-year in June, lower than the 2.1% increase in May. Economists had expected inflation to accelerate slightly to 2.2% in June. For the eurozone's largest economies, the June data showed a mixed situation. Although inflation in France and Spain rose slightly, Italy remained stable. The data are unlikely to prompt ECB officials to change their view that inflation targets are expected to continue to be met this year. Overall inflation data for the 20 countries in the euro zone will be released on Tuesday, with analysts expecting 2%, slightly higher than 1.9% in May. The next meeting of the European Central Bank will be held in July and is expected to suspend interest rate cuts. Since June 2024, the ECB has lowered deposit rates eight times, currently at 2%.
According to reports, US Secretary of Agriculture Brooke Rollins said that the Trump administration may consider imposing tariff exemptions on goods that are difficult to grow in the United States (such as cocoa beans or coffee). Currently, these goods are included in the scope of www.wzhdjgj.comprehensive tariffs, and Democrats attack Republicans to raise costs.
Turkish President Erdogan announced on the 30th that Ankara, the capital of Turkey, will host the 2026 NATO Summit. Erdogan said at a press conference after the cabinet meeting that day that the 2026 NATO summit will be held in Ankara in July 2026, and Türkiye will host NATO member leaders. Erdogan also introduced his attendance at this year's NATO summit at the press conference. He said Türkiye called for lifting restrictions on trade in defense industrial products within the framework of the NATO alliance. Türkiye joined NATO in 1952. Turkey connects Europe and the Middle East, is an important economy in the region, and has an important impact on the stability of Southeast Europe and the Middle East.
Goldman Sachs advanced its forecast for the Fed rate cut and is now expected to resume interest rate cuts in September rather than December, as the impact of tariffs on inflation "looks more than expected"We believe the chances of a rate cut in September are slightly higher than 50%, and we see several possible paths - lower-than-expected tariff effects, larger anti-inflation effects, weak labor markets or panic caused by monthly volatility," wrote the economic team led by chief economist Jan Hatzius. "We suspect that the Fed leadership is consistent with our view that tariffs will only have a one-time impact on price levels. "Goldman Sachs expects the Fed to cut interest rates by 25 basis points three times this year in September, October and December, and lower its terminal interest rate forecast from the previous 3.5%-3.25% to 3.25%. Analysts added: "No rate cuts are expected in July unless the employment data this week is much worse than expected. ”
Thu Lan Nguyen, an analyst at www.wzhdjgj.commerzbank, believes that the outlook for the dollar depends on the reasons behind the Fed's expectation of interest rate hikes. She said that if the bet for interest rate cuts is driven by the impact of inflation on U.S. tariffs is more limited than previously expected, the dollar is likely to rebound in the short term. However, if these expectations are due to the assumption that the Fed will succumb to political pressure, the dollar will face further declines. The market generally expects the Fed to keep interest rates unchanged in July. She said if any politics Policymakers voted against the proposal in favor of rate cuts, which could intensify concerns that the Fed would become more politicized.
Analysts said in a report that if ECB President Lagarde expressed doubts about further rate cuts at the central bank forum held in Sintra, Portugal, the euro could appreciate further. "Although we doubt whether there will be a clear and obvious shift in her monetary policy perspective, we do think she will elaborate on the conditions needed to maintain current policy levels. "Analysts said that her remarks may be biased towards "hawkish", prompting the market to cut its bet on interest rate cuts and support the euro.
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