More USD selling yesterday taking the dollar index to fresh 3-year lows despite Federal Reserve (Fed) member Bostic’s best efforts to sound hawkish. Late in the afternoon, he commented that he believes there will be one more rate cut this year, followed by three more in 2026.
Read more about the Federal Reserve's interest rate decisions here - When is the next Fed interest rate decision?
*Daily move - against G10 rates at 7:00 am, 01.07.25
** Indicative rates - interbank rates at 7:00 am, 01.07.25
Reports this morning are suggesting that the EU is willing to accept Donald Trump's 10% universal tariff but wants lower rates for key sectors like drugs and chips. The White House also commented that they are working on a deal with India.
The dollar is continuing to grind lower this morning, ahead of ISM manufacturing numbers. As ever, anything less than expected will spark fears over the US economy and likely hit the dollar. Ahead of this, we have EU CPI numbers coming out, expected to show a pick-up in prices.
Also this morning we had some comments from the ECB VP Luis de Guindos on the relative price of the euro versus the dollar. Whilst current levels are not a cause for concern, the speed of the ascent and a move beyond $1.20 would be tricky for policymakers.
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.
Have a great day.
