U.S. Currency Drops Posting Soft Inflation Figures
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👉 DXY00 takes a dive of -0.36% today. Surging expectations for the Fed to cut interest rates later this year, courtesy of today's Fed-friendly US May CPI report, has sent the dollar packing. The stock market's strength also frees up liquidity from the almighty greenback. However, the dollar initially saw a rally after US-China trade talks wrapped up with a plan to revive flow of sensitive goods.
🌟 US May CPI increased +2.4% y/y, spot on the forecast. Meanwhile, May CPI ex-food and energy remained at +2.8% y/y, a smaller increase than the projected +2.9% y/y. The markets seem unconvinced about a -25 bp rate cut after the June 17-18 FOMC meeting, standing firm at 0%.
💰 ^EURUSD gets a +0.43% bump today. The Euro is in high spirits, thanks to the dollar's downturn. The ECB's optimistic prediction for Q4 2025 Eurozone wage growth adds fuel to the euro's fire. The ECB forecasts Q4 2025 wage growth rising +1.7% y/y, above the expected +1.6% y/y but below the +5.4% y/y in Q4 2024. The ECB's interest rate cut odds are currently at 13% for the July 24 policy meeting.
Sports enthusiasts may find the current market trends fascinating, as today's surging expectations for the Fed to cut interest rates have sent the dollar packing, potentially leading to opportunities for those interested in foreign exchange trading, a popular sport in the world of finance. The European Central Bank's optimistic prediction for Q4 2025 Eurozone wage growth might also spur interest in futures markets, a common component in many sports.
