The dollar index is down by 0.16% amid easing safe-haven demand as markets responded positively to news from Iran, where the government expressed willingness to discuss uranium enrichment limitations. U.S. President Trump also stated he would hold off on any military action against Iran for two weeks, aiming for a diplomatic resolution. Weaker-than-expected economic data, including an unchanged Philadelphia Fed business outlook at -4.0 compared to an expected -1.5, and dovish comments from Fed Governor Waller, who indicated potential interest rate cuts as early as July, further pressured the dollar.
In Europe, the euro is up by 0.10% despite a decline in the Eurozone’s June consumer confidence index to -15.3 from an expected -14.9 and a significant fall in German producer prices by 1.2% y/y, signaling dovish sentiments towards ECB policy. Meanwhile, the Japanese yen fell to a three-week low against the dollar following reports easing Middle Eastern tensions and dovish sentiment from the U.S. Federal Reserve, overshadowing positive inflation data from Japan where May’s national CPI rose by 3.5% y/y.
Precious metals are retreating, with August gold down $21.00 (-0.62%) and July silver down $0.923 (-2.50%) as easing Middle East tensions diminish safe-haven demand. Notably, gold prices were pressured following reports about Iran’s willingness to negotiate, even as Fed commentary suggested potential interest rate cuts, which typically support metals prices.
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