Important calendar events
The dollar traded near multi-year lows last week and the dollar index remained below the 97.0 level for most of the week. US treasury yields edged higher, with the US 10-year bond yield rising from 4.22% to 4.35%.
The Fed held interest rates steady at 4.25–4.50% in June. The Fed updated its dot plot, which summarizes policymakers’ projections of interest rates for the remainder of the year and into 2026. The Fed’s dot plot maintained forecasts of two more rate cuts in 2025 despite upward inflation revisions.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again.
Top central bank chiefs, including Powell (Fed), Lagarde (ECB), Ueda (BoJ), and Bailey (BoE), participated in a policy panel at the ECB Forum on Central Banking in Sintra on July 1st. Powell spoke in favor of a data-dependent approach, stressing that tariffs delayed rate cuts. Powell’s speech signaled a cautious monetary stance, lowering rate cut expectations.
On the data front, ISM Manufacturing PMI rose to 49.0 in June from 48.5 previously versus 48.8 forecast.
JOLTS job openings jumped to 7.77M in May from 7.40 M in April, versus 7.32M expected. The ADP Non-Farm report on Wednesday showed a surprising 33K job decline in June versus a forecasted gain of about 100K. This was the first negative employment change since March 2023, weighing the dollar down.
US Nonfarm Payrolls (NFPs) on Thursday, however, surprised on the upside, signaling continued labor market resilience. The stronger print boosted the dollar across major pairs, as traders dialed back Fed rate-cut bets. US NFPs showed that new jobs created in June went up to 147k against the 120K anticipated, from 139K in May. Meanwhile, wage growth eased to 0.2% MoM in June from 0.4% prior. The unemployment rate went down to 4.1% in June from 4.2% in May against 4.3% anticipated.
After the release of the June US jobs report, the probability of a July cut dropped from around 24% to below 7%. A strong labor market allows the Fed to maintain its wait-and-see approach and delay rate cuts. A rate cut in September is fully priced in and markets anticipate 2-3 rate cuts until the end of the year.
The final US GDP for the first quarter of the year came in lower than expected, showing a 0.5% contraction, down from initial estimates of 0.2%. Concerns that the US economy may be entering recession, put pressure on the dollar last week.
US headline inflation eased to 2.4% Year-on-Year in May, missing forecasts of 2.5%. Monthly CPI rose by just 0.1% against 0.2% expected. Core CPI, which excludes food and energy held steady at 2.8% annually, missing estimates of 2.9%. Monthly core CPI rose by 0.1%, far softer than the 0.3% forecast.
This coming week the FOMC Meeting Minutes released on July 9 may cause volatility in the dollar. Traders will scrutinize the last meeting’s minutes for hints on whether policymakers are in favor of a September rate cut. Any hawkish sign could lift the dollar. A dovish tone would likely drive Treasury yields lower and weigh on the dollar.
EUR/USD remained bullish last week, closing near 1.178 on Friday. If the EUR/USD pair declines, it may find support at 1.134, while resistance may be encountered near 1.190.
Last week, the Euro came under pressure after fresh inflation data showed headline inflation in the euro area went up in June.
The EU June CPI flash estimate came in at 2.0% year-on-year, which was in line with expectations but was above the previous print of 1.9%. Core inflation, which excludes food and energy, remained steady at 2.3% annually in June as forecasted. Sticky inflationary pressures reinforced the ECB's cautious stance, trimming expectations for further rate cuts, but didn't stop the Euro’s rally. Market odds of another rate cut in July dipped after the release of the EU inflation data, with consensus leaning toward a final 25 bp rate cut in September.
German preliminary CPI data for June showed that inflationary pressures in the Eurozone’s leading economy are easing faster than anticipated, however. German CPI was flat at 0.0% in June versus 0.2% growth anticipated and down from May’s 0.1% rise. German headline inflation came in at 2.0% annually, down from 2.1% in May, missing expectations of 2.2%.
The ECB delivered another rate cut at its June meeting, lowering its main refinancing rate for the eighth consecutive time. ECB policymakers reduced the benchmark interest rate by 25 basis points to 2.5%. ECB President Christine Lagarde emphasized a data-dependent approach moving forward. ECB policymakers have expressed a cautious approach regarding future rate cuts and are moving towards policy normalization.
ECB President Christine Lagarde reinforced this cautious shift at the Sintra conference and press briefing in Portugal. Lagarde warned that inflation dynamics could be derailed based on US tariffs and other geopolitical factors. Lagarde also stressed that the ECB stands “well-positioned” after its June 25 bp cut, hinting that the bank is nearing the end of its easing cycle.
Eurozone GDP for the first quarter of 2025 was revised upward to reflect 0.6% expansion, up from 0.3% previously, beating the 0.4% consensus. The upward revision highlights resilience amid global trade headwinds.
GBP/USD dipped to 1.365 last week, driven mainly by Sterling’s weakness. If the GBP/USD rate goes up, it may encounter resistance at 1.378, while support may be found near 1.337.
The Sterling came under pressure last week after fiscal and political developments caused turbulence in markets. Chancellor Rachel Reeves scrapped £5bn in planned welfare cuts, triggering concerns over fiscal stability.
Political uncertainty drove the Sterling down, especially after British PM Starmer hesitated to reaffirm his support to Reeves. Starmer eventually stated that he gives his full backing to Reeves, but rumors are circulating that Reeves will not remain Chancellor for long. Concerns over Chancellor Reeves’ welfare reforms and broader fiscal credibility triggered a gilt sell-off and GBP/USD marked its worst weekly loss since early April.
Bank of England policymakers decided to hold rate cuts in a closely split vote in June. MPC members voted to keep interest rates steady at 4.25%, with the vote split 6–3 in favor of holding rate cuts.
BOE Governor Andrew Bailey’s post-meeting speech was slightly dovish hinting at a gradual, data‑driven easing path, but cautioning that this isn’t a signal for an immediate rate cut. Bailey advocated for a slow and measured easing, highlighting labor market softness and rising energy risks tied to geopolitical instability. Markets are pricing in 2-3 rate cuts this year, with the first cut expected in August or September.
Market focus shifted to Sintra, Portugal, last week, where BOE Governor Andrew Bailey participated in the ECB policy forum. Bailey stressed that UK rates are “on a gradually downward path,” citing a softening labor market and persistent inflationary pressures. Bailey’s stance was perceived as mildly dovish by markets, accelerating rate cut expectations and putting more pressure on the Sterling. Markets are now pricing in 2-3 more rate cuts by year-end, while a rate cut in August is fully priced in.
British headline inflation surged to 3.5% year-on-year in April, up from 2.6% in March and surpassing forecasts of 3.3%. The hotter-than-anticipated inflation data have dampened hopes for rate cuts shortly, with markets currently pricing in only one additional cut in 2025.
UK GDP contracted by 0.3% in April, sharply missing estimates of a 0.1% drop. UK economic outlook is declining, marking the steepest economic contraction in 18 months. Quarterly GDP data, however, has been more upbeat. The British economy grew by 0.7% in Q1 2025, outperforming forecasts of 0.6% growth and marking the fastest growth among G7 nations.
This coming week, UK GDP is due on July 11. This week’s GDP print could determine the BOE’s rate cut path. Markets anticipate the data to show that the British economy contracted by 0.3% in May. Weak numbers may revive August cut bets, weighing on the Sterling.
USD/JPY traded sideways last week, oscillating around the 144.4 level. If the USD/JPY pair declines, it may find support at 142.3. If the pair climbs, it may find resistance at 148.0.
The Yen saw a modest recovery last week, helped by firmer domestic data and hawkish signals from the Bank of Japan. The June Tankan survey surprised slightly to the upside—large manufacturers' sentiment rose to +13, up from +11—while consumer confidence hit its highest level since 2021, signaling a slow but steady recovery in Japan’s economy.
The Bank of Japan held its policy rate at 0.5% in June and confirmed a slowdown in its bond-buying taper beyond the fiscal year 2026. BOJ policymakers unanimously chose to slow the tapering of government bond purchases, cutting the quarterly pace by half starting in April 2026. This effectively signals a more gradual exit from stimulus.
BOJ Governor Kazuo Ueda’s commentary struck a cautious tone, yet with a growing emphasis on Japan’s inflation. Ueda stressed that escalating global risks—like trade tensions and Middle East volatility—warrant a cautious policy shift. Ueda emphasized that future rate moves would be data-dependent and hinted at a readiness to raise interest rates should inflation continue to go up.
Last week Ueda expressed optimism in Japan’s economy and the wage-inflation cycle, hinting that further rate hikes are possible this year if underlying inflation continues to firm. As a result, rate hike expectations were revived, with market odds in favor of a September or October hike rise, boosting the Yen.
National core CPI came in at 3.7% Year on Year in May, surpassing expectations of 3.6% and marking the highest pace since January 2023. On Friday, Tokyo’s core CPI came in at 3.1% year-on-year in June, decelerating from 3.6% in May and missing estimates of 3.3%.
Japan's economy remained stagnant in the first quarter of 2025, exceeding the anticipated 0.2% decline. On an annualized basis, GDP shrank by 0.2%, compared to -0.7% in the previous reading. The BOJ may delay interest rate hikes further to support the country’s weakening economy, especially if trade tensions rise.
Gold prices rallied last week, rising from $3,260 to $3,340 per ounce. If gold prices rise, they may encounter resistance at $3,450 per ounce, while if gold prices decline, support may be encountered near $3,244 per ounce.
Last week gold gained strength, buoyed by a mix of tariff uncertainty and shifting US rate cut expectations.
US President Trump’s tariff threats were renewed last week, causing market turmoil and raising the appeal of the safe haven gold. Trump warned that reciprocal tariffs of up to 70 % could kick in on August 1 if no deals are struck, and the EU responded with warnings of retaliatory duties.
In addition, disappointing US economic data drove the dollar to its lowest point since January 2021, raising the appeal of gold. Gold prices have been typically directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar traded near multi-year lows last week and the dollar index remained below the 97.0 level for most of the week, boosting gold prices.
Meanwhile, the US Senate approved President Trump’s “Big, Beautiful Bill” last week. The bill will likely give rise to fiscal deficits, underpinning bond yields and reducing real yields, boosting gold prices.
Geopolitical relief, however, gave rise to risk-on sentiment, limiting demand for safe-haven assets. Easing tensions in the Middle East including Israel's agreement to resume Gaza ceasefire talks in Qatar, a temporary de-escalation in Red Sea tensions, and improved US-China trade relations increased market appetite for risk assets capping gold’s gains.
Gold prices are supported by rising Fed rate cut expectations. The Fed held interest rates steady at 4.25–4.50% in June, as expected. The dollar rallied post-meeting as markets digested the Fed’s June decision and dot‑plot update.
The Fed also updated its dot plot, which summarizes policymakers’ projections of interest rates for the remainder of the year and into 2026. The Fed’s dot plot maintained forecasts of two more rate cuts in 2025 despite upward inflation revisions.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again.
Fed rate cut expectations went down after the June jobs report showed +147K nonfarm payrolls (vs. ~110K forecast) and the unemployment rate unexpectedly dipped to 4.1%. The probability of a July cut dropped from around 24% to below 7%. A strong labor market allows the Fed to maintain its wait-and-see approach and delay rate cuts. A rate cut in September is fully priced in and markets anticipate 2-3 rate cuts until the end of the year.
Oil prices remained steady last week and WTI price hovered close to the $67.3 per barrel level. If oil prices retreat, they may encounter support near $60.0 per barrel, while resistance may be found near $78.4 per barrel.
Oil prices were quiet last week ahead of the OPEC meeting on Saturday, July 5. OPEC+ surprised markets on Saturday by deciding to raise oil production for August by 548,000 bpd, well above the prior 411,000 bpd. This supply boost signals the cartel’s intent to allow oil prices to ease amid growing concerns over weakening global demand and trade uncertainties. OPEC’s move is likely to cause oil prices to drop this week as markets react to OPEC’s announcement.
Meanwhile, geopolitical tensions eased somewhat with Iran’s progress on nuclear talks, putting pressure on oil prices.
The US Energy Information Administration announced a surprising 3.8M barrel build for the week to Friday, June 27, against expectations of a 3.5M draw.
Oil prices are kept in check by high central banks’ interest rates. The Fed held interest rates steady at 4.25–4.50% in June, as expected. The dollar rallied post-meeting as markets digested the Fed’s June decision and dot‑plot update.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again. Fed rate cut expectations went down after the June jobs report showed +147K nonfarm payrolls (vs. ~110K forecast) and the unemployment rate unexpectedly dipped to 4.1%. The probability of a July cut dropped from around 24% to below 7%. A strong labor market allows the Fed to maintain its wait-and-see approach and delay rate cuts. A rate cut in September is fully priced in and markets anticipate 2-3 rate cuts until the end of the year.
Bitcoin remained bullish last week, briefly touching the key $110,000 mark but easing to $109,000 over the weekend. If BTC price declines, support can be found at $98,000, while resistance may be encountered at $110,500.
Ethereum price was also bullish last week, rising from ~ $2,530 to $2,600. If Ethereum's price declines, it may encounter support near $2,100, while if it increases, it may encounter resistance near $2,875.
Bitcoin rallied strongly last week, influenced by a combination of institutional developments, market sentiment, and geopolitical factors and Bitcoin price rose above $110,000. Bitcoin is on a path to reach its all-time high of ~111,000 again and may register fresh record highs over the next few days.
Institutional developments have been bolstering Bitcoin over the past few months. The establishment of a US strategic Bitcoin reserve and the passage of the GENIUS Act, which regulates stablecoins, have bolstered institutional confidence in Bitcoin as a legitimate asset class, leading to increased inflows into Bitcoin ETFs.
Crypto markets are also benefiting from the de-escalation of the crisis in the Middle East. The recent Iran-Israel truce and Iran’s progress on nuclear talks are promoting a risk-on sentiment.
Cryptocurrency prices are affected by central banks’ interest rates. The Fed held interest rates steady at 4.25–4.50% in June, as expected. The dollar rallied post-meeting as markets digested the Fed’s June decision and dot‑plot update.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again. Fed rate cut expectations went down after the June jobs report showed +147K nonfarm payrolls (vs. ~110K forecast) and the unemployment rate unexpectedly dipped to 4.1%. The probability of a July cut dropped from around 24% to below 7%. A strong labor market allows the Fed to maintain its wait-and-see approach and delay rate cuts. A rate cut in September is fully priced in and markets anticipate 2-3 rate cuts until the end of the year.
BTC/USD 1h Chart
ETH/USD 1h Chart
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Written by:
Myrsini Giannouli
चलनिधि प्रदाता के रूप में उद्योग उपस्थिति
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