The currency market continues to approach the headlines on cautious tariffs, generally subscribing to the opinion that Trump is using the deadlines that are coming as leverage for commercial negotiations, but it is unlikely to maintain high reciprocal tariffs for a long time. The US dollar (USD) has struggled to find a clear direction as a result, with the Fed narrative remaining as the main engine for the currency market. Although tariff decisions have influenced the Fed, markets are now more focused on incoming data, given the volatility and unpredictability of US commercial policy, says the FX analyst of ING, Francesco Pesole.
Trump is about to announce commercial updates
“Until we receive some key data, the dollar may not deviate too much from the current levels. That is unless the markets find something notable in the June FOMC minutes that will be published tonight. The consensus expectation is probably two members, Bowman and Waller, they will have indicated their dissent in the meeting before delivering moderate comments to the media a few days later. But if the minutes show a more moderate front, then the dollar Affected, since the bar for data that justifies a cut in summer would be lower. “
“Except for important surprises, we believe that tariff developments (Trump is about to announce commercial updates about at least seven countries today) are more likely to boost relative performance between currencies with exposure to similar risk but sensitivity different from US tariffs, instead of materially changing the dollar itself. This dynamic is particularly evident in Asia.”
“The Yen, for example, remains under pressure for Trump’s commercial rhetoric to Japan – and the consequences for public finances before the next elections. Instead, the Philippine weight could benefit from diverted flows from other Asian markets affected by higher reciprocal tariffs. The increase in copper prices during the night can also leave more durable effects in copper exporting countries.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
