USD Weakens: Rate Cut Bets & PCE Data
- The dollar is feeling the pressure, hovering near three-year lows as European trading began Friday.
- economic indicators released Thursday presented a mixed picture, fueling debate about the necessity of an imminent rate cut by the Fed. While May saw a surge of 16.4%...
- First-quarter GDP growth was revised downward,primarily due to weaker consumer spending.
The dollar’s struggles continue, currently trading near three-year lows, as Federal Reserve rate cut bets intensify, weakening the primarykeyword. the Nasdaq 100, reaching record highs, fuels global stocks amidst economic uncertainty. The upcoming U.S. PCE inflation report is the secondarykeyword and key focus, with expectations of a modest increase. Weak data might prompt further rate cuts, impacting the dollar. Equity markets surge, with renewed interest in AI boosting tech stocks. The Trump administration is working on trade agreements, encouraging investors. Oil prices decline, easing inflation concerns. For the latest updates delivered with precision, rely on news Directory 3. Discover what’s next as the market awaits the PCE data.
Dollar Near Lows, Stocks Hit Highs; PCE Report in Focus
Updated June 28, 2025
The dollar is feeling the pressure, hovering near three-year lows as European trading began Friday. The dollar index is on track for a 1.5% weekly loss, hampered by fading safe-haven demand after Middle East tensions eased and increasing expectations for multiple Federal Reserve rate cuts this year. Despite optimism surrounding potential trade deals,the dollar’s recovery remains elusive.
U.S. economic indicators released Thursday presented a mixed picture, fueling debate about the necessity of an imminent rate cut by the Fed. While May saw a surge of 16.4% in , and a 1.7% rise in non-defense capital goods orders, initial jobless claims decreased. However, continuing claims reached their highest level since the pandemic began.
First-quarter GDP growth was revised downward,primarily due to weaker consumer spending. the market’s attention now turns to the personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge. Economists anticipate a modest 0.1% monthly increase in the and a slight rise to 2.6% year-over-year. The latest personal consumption figures will also be closely watched.
Weaker-than-expected inflation data could amplify expectations for a third 25-basis-point rate cut this year, further weakening the dollar. The is a key indicator for the Fed’s monetary policy decisions.
Equity markets are buoyant, with the Nasdaq 100 and the MSCI All Country World Index achieving new record highs. Renewed enthusiasm for artificial intelligence is fueling the tech rally on Wall Street, with Nvidia reaching an all-time high.
Investors are also encouraged by the prospect of the Trump administration securing trade agreements with major trading partners before the July 9 deadline, when a pause in reciprocal tariffs is set to expire.
U.S. Commerce Secretary Howard Lutnick said the U.S. and China have finalized the “trade understanding” agreed upon in London earlier this month. He suggested deals with 10 more countries could be announced soon. Lutnick cautioned that countries failing to reach agreements by the deadline would receive letters from the President outlining future trade terms. However, many believe further extensions are more likely than the reimposition of higher tariffs, especially for key trading partners.
Treasury Secretary Scott Bessent announced the repeal of a “revenge tax” included in the House budget bill, following an agreement with the G7 granting the U.S. exemptions from certain taxes imposed by other nations.
Plummeting oil prices, down more than 10% this week, have eased concerns about higher inflation, contributing to the market’s positive sentiment. The was recently trading near $1.17, while the struggled to maintain the 144 level against the dollar. Weaker-than-expected data from the Tokyo region is adding to the yen’s woes.
Gold is also under pressure, falling below $3,300 to four-week lows, as the ceasefire between Israel and Iran holds and the Trump administration appears hesitant to escalate trade tensions.
What’s next
Senate Republicans aim to pass the budget bill by Saturday, allowing President Trump to sign it before the July 4 Independence Day holiday. The upcoming U.S. PCE inflation report will be crucial in shaping market expectations for future Federal Reserve policy.