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The dollar index (DXY) fell by 0.65% on Monday, reaching a one-week low, influenced by a rally in the S&P 500 and lower T-note yields. Additionally, U.S. June leading economic indicators decreased by 0.3% month-over-month, matching expectations. Meanwhile, Federal funds futures indicate a 3% chance of a 25bps rate cut at the upcoming July 29-30 FOMC meeting and a 58% probability at the subsequent September 16-17 meeting.
The EUR/USD rose by 0.58% as the dollar weakened, spurred by expectations that the European Central Bank (ECB) is closer to ending its easing cycle than the Federal Reserve. However, this trend is tempered by concerns over potential new U.S. tariffs on EU goods. In Japan, the USD/JPY fell by 0.99% after the ruling Liberal Democratic Party (LDP) lost its majority in the upper house elections, winning only 47 seats.
Gold futures closed up 1.43%, reaching a four-week high as dollar weakness and lower global government bond yields provided support. Silver also increased by 2.26%. These movements are linked to anticipations surrounding possible Federal Reserve interest rate cuts amid ongoing global trade tensions.
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