Dollar weakens, gold rises on trade uncertainty, deficits, and positive economic news

From Yahoo Finance: 2025-07-01 10:51:00

The US dollar index is down by -0.32%, hitting a 3-1/3 year low due to trade policy uncertainties and rising deficits. Stronger-than-expected ISM manufacturing and JOLTS job opening reports helped the dollar recover briefly. Fed Chair Powell anticipates tariff impacts on inflation. Markets predict a 21% chance of a -25 bp rate cut.

EUR/USD is up by +0.10%, reaching a new 3-3/4 year high. The euro benefits from the dollar’s weakness and strong economic news. However, comments from ECB member Kazaks about potential rate cuts, along with dovish inflation news, caused the euro to fall back slightly.

Eurozone June CPI rose to +2.0% y/y, meeting expectations, with core CPI at +2.3% y/y. ECB 1-year and 3-year inflation expectations eased unexpectedly. June manufacturing PMI was revised up to 49.5, and German unemployment change was better than expected.

USD/JPY is down by -0.51%, with the yen at a 3-1/2 week high against the dollar. Japanese economic strength supports the yen, with consumer confidence and the Tankan Q2 survey both exceeding expectations. Yen weakened slightly as T-note yields rose on positive US economic news.

Gold and silver prices surged today, with gold up by +1.64% and silver up by +1.13%. Precious metals benefit from the dollar’s decline, trade uncertainty, and concerns over the US budget deficit. Silver prices also rose due to strong global economic news and continued fund buying.

Read more: Dollar Weakens and Gold Soars on Trade Uncertainty