USD Weakens: Fed Hints & Cooling Tensions
- The dollar is facing sustained pressure as markets look for indications that the Federal Reserve might soften its monetary policy.
- Attention is focused on upcoming economic data,particularly employment figures.
- Fed Chair Jerome Powell recently reiterated his concerns about the impact of tariffs on inflation during congressional testimony.
The U.S. dollar is under pressure as markets scrutinize upcoming economic data for clues about Federal Reserve policy shifts, with employment figures poised to influence the Fed’s stance. Abating geopolitical risks and dovish sentiment among some Fed officials contribute to the USD‘s weakness. Traders are pricing in a 25% chance of a rate cut on July 30. Beyond the employment data and Federal reserve analysis,market participants are also monitoring the EUR/USD pair,with a potential move toward $1.20 if the dollar continues to decline. Further complicating matters, former President Trump’s consideration of an early appointment for the next Fed chairman is creating increased interest.News Directory 3 delivers this vital analysis on market movements, so you can start your day informed. Durable goods orders and the PCE index are next.Discover what’s next for the dollar’s trajectory.
Dollar Under Pressure as Markets Eye Fed Data
Updated June 28, 2025
The dollar is facing sustained pressure as markets look for indications that the Federal Reserve might soften its monetary policy. Abating geopolitical risks and a slightly dovish sentiment among some fed officials are contributing to the pressure on the U.S. currency.
Attention is focused on upcoming economic data,particularly employment figures. The thinking is that weaker job numbers could persuade some hawkish members of the Federal Open Market Committee (FOMC) to consider a more dovish approach, something that recent inflation data failed to achieve. The markets are pricing in a 25% chance of a rate cut on July 30,and 62 basis points of easing by the end of the year.
Fed Chair Jerome Powell recently reiterated his concerns about the impact of tariffs on inflation during congressional testimony. His remarks offered little clarity on potential easing plans, emphasizing strict conditionality.
adding to the mix, reports suggest that former President Trump is considering an early appointment for the next Fed chairman, further fueling dovish expectations. Currently, two Fed members appointed by Trump, Christopher waller and Michelle Bowman, have publicly disagreed with the Fed’s cautious stance.
Speeches from Fed officials, including Austan Goolsbee, Thomas Barkin, Mary Daly, and Lorie Logan, could also move markets. Goolsbee is considered dovish, while Barkin, Daly, and Logan lean hawkish.
Meanwhile, the EUR/USD pair has broken above $1.163 but is encountering resistance around $1.17. Some support for the euro may have come from NATO’s agreement on defense spending targets and conciliatory remarks from Trump toward most allies.
Though, the EUR/USD’s movement remains largely tied to the dollar’s performance. A break above $1.17 could pave the way for a move toward $1.20, contingent on further weakening of U.S.-specific factors.
What’s next
Traders will be closely monitoring durable goods orders and weekly jobless claims for further insights into the U.S. economy. The Fed-preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, will be released soon and could further influence market sentiment.