The U.S. dollar index is down 0.79%, hitting a 3-1/4 year low due to trade uncertainty sparked by President Trump’s announcement to impose unilateral tariffs on multiple U.S. trading partners within the next two weeks. This decline was compounded by weaker-than-expected jobless claims, which remained unchanged at 248,000, and a rise in continuing claims to 1.956 million, both indicating a struggling labor market.
In related economic indicators, the May final-demand Producer Price Index (PPI) rose to 2.6% year-on-year, while the PPI excluding food and energy fell to 3.0%. The market currently assigns a 3% chance for a 25 basis point rate cut by the Federal Reserve following the June 17-18 FOMC meeting, which has heightened expectations for potential monetary easing.
In currency movements, the euro is up 0.82%, reaching a 3-1/2 year high as ECB comments contribute to the upward pressure. The Japanese yen also gained as a safe haven, reflecting increased demand following the tariff threats. Additionally, August gold prices rose by $64 (1.91%), boosted by the drop in the dollar and heightened tensions in the Middle East.
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