The US dollar finished slightly mixed on Friday, but still posted gains during the week, as investors became more cautious towards risky assets. The dollar was under pressure from lower US Treasury yields, especially at short and medium maturities, and another sharp decline in crude oil prices as markets grew more confident that tensions in the Middle East would not disrupt energy flows through the Strait of Hormuz.
On the currency front, the dollar fell against the euro, pound and Canadian dollar, but the declines were modest. The dollar rose against the Australian dollar and the New Zealand dollar. Almost unchanged against the Swiss franc and the Japanese yen.
The performance of the dollar against major currencies
- EUR/USD: Euro roses 0.13% to 1.1384
- GBP/USD: The British pound rose 0.01% to 1.3192
- USD/JPY: The dollar fell 0.02% to 161.74 yen
- USD/CHF: The dollar fell 0.05% to 0.8094 Swiss francs
- USD/CAD: The Canadian dollar rose 0.09%With the US dollar/Canadian dollar falling to… 1.4185
- AUD/USD: The Australian dollar fell 0.22% to 0.6893
- NZD/USD: The New Zealand dollar fell 0.19% to 0.5636
For the trading week, the US dollar finished strong against all major currencies with the biggest gains being made against the Australian dollar and the New Zealand dollar. The dollar’s gains were limited against the Japanese yen as USDJPY tested a 40-year high at 161.95 and found willing sellers.
- Euro, +0.72%
- Japanese Yen +0.27%
- British Pound +0.31%
- Swiss Franc +0.33%
- Canadian dollar, +0.27%
- Australian Dollar +1.70%
- NZD +1.82%
The broader S&P and Nasdaq closed lower for the fifth straight day (although declines in the S&P were modest over the past three trading days). The Nasdaq was the weakest performer, down 0.24%, while the Dow Jones Industrial Average fell 0.09% and the S&P 500 fell 0.05%.
The Nasdaq index fell by 4.60% during the weekThe S&P 500 fell 1.95%, its worst weekly performance since the week ending June 1. The Dow Jones Industrial Average continues to hold up relatively well. Despite falling 0.09% on the day, the benchmark index rose 0.60% during the week and is still up 1.65% for June.
US bond yields fell today in both the short and shorter term. The longer end saw modest gains:
- The two-year yield is 4.096%, -2.4 basis points
- 5-year yield 4.133%, -2.9 basis points
- 10-year yield 4.376% -1.5 basis points
- The 30-year yield is 4.868%, +0.9 basis points
Looking at today’s economic data:
The United States provides the trade balance of goods
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The commodity deficit widened sharply to – $105.8 billion reverse – $85.0 billion expected and – $82.4 billion previously. Exports fell while imports rose, making net trade a potential drag on second-quarter GDP trackers. Bias: the weakest.
Wholesale/retail stocks in the United States
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Wholesale inventories rose 0.3%In line with estimates, while retail inventories rose 0.6%. The buildup of inventory can support GDP, but only if demand holds up. Bias: Neutral to slightly stronger.
University of Michigan Consumer Confidence
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The final June morale came in at 49.5lowest Expected 50.0but above the initial 48.9 And May 44.8. Consumers remain pessimistic, but sentiment has improved compared to May. Bias: Mixed, but still weak overall.
Comprehensive bias
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Lean aggregated data Economically weaker. The larger trade deficit is the main negative factor, sentiment remains low, and inventories provide only modest compensation.
The Fed’s Kashkari spoke for the first time since the FOMC’s interest rate decision last week. Kashkari struck a noticeably upbeat tone on Friday, saying he had gone from expecting a rate cut earlier this year to expecting a rate cut now. One increase in interest rates by the end of the year. Kashkari said that inflationary pressures have become broader-based and are no longer solely related to rising energy prices linked to the conflict in the Middle East. He also expressed concern that geopolitical risks remain high and cautioned against assuming that the threat of inflation has passed.
Kashkari stressed that his forecast is not set in stone — describing it as a “pencil” forecast that will depend on incoming data — but reiterated that inflation has remained too high for too long and remains the Fed’s top priority. His comments reinforce an increasingly hawkish shift within the Fed, with a growing number of policymakers now seeing the possibility that interest rates may need to move higher rather than lower if inflation fails to cool.
Next week, the US jobs report will highlight the week’s data. The date will be released on Thursday because the 4th of July holiday will be celebrated on July 3.
Fed Chairman Warsh and other central bankers will highlight the speakers when they all speak on Wednesday at 9 a.m.
Main economic calendar: week from June 29 to July 3
Monday 29 June
Keynote speakers
- 1:30 PM ET: European Central Bank President Christine Lagarde speaks.
Tuesday 30 June
Economic versions
- German preliminary CPI (month/month): Expectations +0.1% | Before -0.2%
- Canada’s GDP (month/month): Expectations +0.4% | Before -0.1%
- US Conference Board on Consumer Confidence: Forecast 94.2 | Before 93.1
- Job opportunities in the United States JOLTS: Forecast 7.28 million | 7.62pm ago
Wednesday, July 1
Economic versions
- Eurozone Core CPI Rapid Estimate (Y/Y): Expectations 2.5% | Advance 2.5%
- Eurozone CPI Rapid Estimate (Y/Y): Forecast 3.0% | precedent 3.2%
- US ADP Employment Change: Expectations +118K | Previous +122 thousand
- US ISM Manufacturing PMI: Forecast 53.7 | Before 54.0
- US ISM Manufacturing Prices Paid: Expectations 79.0 | Before 82.1
Keynote speakers
- 9:00 AM ET: Bank of Canada Governor Tiff Macklem speaks.
- 9:00 AM ET: European Central Bank President Christine Lagarde speaks.
- 9:00 AM ET: Bank of England Governor Andrew Bailey speaks.
- 9:00 AM ET: Federal Reserve Chairman Kevin Warsh speaks.
- 10:30 AM ET: European Central Bank President Christine Lagarde speaks.
Thursday, July 2
Economic versions
- Consumer Price Index in Switzerland (month/month): Expectations +0.1% | Previous +0.2%
- Average hourly earnings in the United States (month/month): Expectations +0.3% | Previous +0.3%
- US Nonfarm Payrolls Report: Expectations +114K | Previous +172 thousand
- Unemployment rate in the United States: Expectations 4.3% | precedent 4.3%
- Initial unemployment claims in the United States: Expectations 220 thousand | Previous 215 thousand
Friday, July 3
Keynote speakers
- 4:00 AM ET: European Central Bank President Christine Lagarde speaks.
- 11:00 AM ET: Bank of England Governor Andrew Bailey speaks
