The dollar index (DXY) fell by -0.18% on Wednesday, reaching a two-week low, influenced by improved trade prospects between the EU and the US and a decline in US existing home sales, which dropped -2.7% to 3.93 million—significantly below the expected 4.00 million. In response to this data, Federal funds futures are pricing in a 4% chance of a rate cut in July and 58% for the September meeting.
The euro rose by +0.13% to a two-week high, driven by optimism for a potential EU-US trade agreement imposing a 15% tariff on imports. Meanwhile, Japanese yen appreciated slightly, bolstered by a US-Japan trade deal announced by President Trump, which lowered tariffs on US imports from Japan to 15% and involved commitments for significant investment and purchases from the US.
In precious metals markets, gold prices initially hit a five-week high before closing down -1.34% as easing trade tensions and stronger global bond yields decreased demand for safe-haven assets. Fund activity remains robust, with gold and silver ETF holdings reaching two- and three-year highs, respectively.
