- The US dollar acquires land after June CPI release, with DXY trading above 98.00 psychological levels.
- The market spirit is cautious amidst constant tariff hazards from US President Donald Trump.
The US Dollar (USD) expanded its Intrade Advance on Tuesday after the June Consumer Price Index (CPI) reports, as the traders re -accepted their expectations of reducing the monetary policy by the Federal Reserve (Fed). After the release of the June CPI report, the market expectations have been specifically transferred to cut near-term Federal Reserve Rate. According to the CME Fedwatch Tool, the possibility of cutting the rate in July meeting has fallen to about 2.6% before 6%. This weekMeanwhile, the possibility of rate cuts in September meeting has also decreased, with about 60% to about 54%.
Greenback is acquiring land as the markets have expected to reduce the imminent policy, the Fed is expected to stay in waiting and viewing mode until inflation shows more decisive progress towards 2% target. At the time of writing, the US Dollar Index (DXY) is holding the firm around 98.70, marking its strongest level since 23 June, which has a profit of more than 0.50% as the speed of boom continues.
The US CPI report revealed that the headline inflation rose 0.3% on a monthly basis – the biggest growth in five months – the annual rate brings up to 2.7% to 2.4% in May. Both readings were in line with market expectations. However, the core CPI, which excludes volatile food and energy components, increased 0.2% mother, below 0.3% forecast and slightly above 0.1% profit in May. On an annual basis, the core inflation grew from 2.8% to 2.9%, which indicates constant value pressures despite a soft monthly print.
The report has shown firm price benefits in energy, transport and tariff affected areas, it has been suggested that business related inflation has started flowing through consumers.
Fed Chair Jerome Powell clearly stated that uncertainty on the impact of tariffs is one of the main reasons that the central bank has prohibited cuts in interest rates. Powell exposed that Fed “when we looked at the size of the tariff, the fed had gone on hold,” and now intends to assess how consumer will filter the tariffs through prices and development before reducing the monetary policy.
While some fed officials believe that tariffs can only cause a temporary increase in prices, many are concerned that inflation can be more permanent, reducing low rates in the near period for the fed.
Market Movers: Trump doubles on the criticism of tariffs and fed poly
- After the June CPI report, President Donald Trump said the truth socially to call for immediate interest rate cut: “Consumer prices low. Reduce the fed rate, now !!!” He argued that slashing rates could save more than a trillion dollars annually to the US government in interest payment. The post adds fresh political pressure on the Federal Reserve, even inflation remains above the target and markets continue to price only in gradual ease.
- President Trump also confirmed his strong support for the Cryptocurrency Act, calling the “Crypto Week” to vote on the House Genius Act this week. In a true social post, Trump described the bill as a major step towards making the United States a global leader in digital assets. He urged the Republican to vote in favor, stating that the law would keep the country “light forward” of global contestants like China and Europe. Trump implicated digital assets as the future of finance and part of his broad vision to strengthen America’s leadership in technology and innovation
- On Monday, US President Donald Trump announced a plan to implement “very serious tariffs” – possibly up to 100% – a peace deal with Ukraine on Russian exports has not reached within 50 days. In another growth, Trump also warned of “secondary tariffs” on countries that continue to engage in business with Russia, especially targeting people who still import Russian oil and gas. The move aims to economically separate Moscow and the pressure on its business partners including China, India and Türkiye is increasing. These aggressive trade threats have increased the uncertainty of the global market and have increased the possibility of further disruption in the global supply chains, especially in the areas of energy and objects.
- The yield on the benchmark US10 Year Year Treasury Note remained stable above 4.43% on Tuesday, marking a month’s high, investors are waiting for today’s June CPI report. The continuous increase in yields shows the ongoing expectations that inflation can be elevated due to the pressures related to the tariff, indicating that the Federal Reserve can delay the cuts cut in interest rate until the price increase does not show a clear indication of cooling.
- US President Donald Trump has once again targeted Fed Chair Jerome Powell. In the comments made on Monday, Trump called Powell a “knockhead” and criticized them for keeping the interest rates too high, arguing that the rates should be already close to 1%. He also claimed that the economy was damaging the economy by refusing to move forward rapidly on the rate cut in poly rates. In addition to his policy criticism, his administration as Trump’s comment investigated the recent $ 2.5 billion renewal project of the Fed, suggesting that the cost was high and the possibility of firing Powells “for reason”.
- The Supreme Court has indicated that a president cannot remove a fed chair only for policy disagreement, may be the basis for removal of misconduct, or mismanagement. However, the White House National Economic Council director Kevin Haset has stated that the issue “is being seen” to determine if it provides sufficient reasons.
- According to the Washington Post, Haset is emerging as a major contender to succeed Powell as the next Federal Reserve Chair. Haset supported President Donald Trump’s lower rates and risks to the push and is seen as a lack of policy autonomy by the markets.
- Looking forward, traders will be given full attention to the speeches of several fed officers later today, which is stronger than the data of US inflation. Fed Governor Michael Barr and Mitchell with Richmond Fed President Tom Barkin, all are scheduled to speak. With the next FOMC meeting close to the meeting, any change in tone can affect the expectations of interest rate and affect the direction of the near -term of the US dollar.
Technical Analysis: DXY confirms rapid breakouts as the speed is above 98.00
In the last two weeks, US dollar index (DXY) 97.70, supported by 9-day moving average, is constantly recovering. Following the consolidation period, the index is now decisively broken above the upper range of the falling veg pattern, the key cleans the 98.00 resistance level and moves to 98.55 during the US session. This breakout confirms a short-term rapid continuity, opening the door for a possible rally towards 98.80–99.00 region in coming sessions.
Momentum indicators are more creative changes. The relative power index (RSI) has increased to 57.23, which indicates increasing purchase interest in the form of brakeout profit speed. However, the average directional index (ADX) remains relatively weak at 12.44, suggesting that the trend is still in its early stages and may require further confirmation. Already released with inflation figures, the market focus now shifts to purchase-foot-wealth and can the DXY can maintain speed over the veg structure. Tatkal support is now at 98.00, followed by 9-day EMA at 97.70.
