Dollar Crushed as Dovish Inflation Data and Trade Tensions Weigh; Euro Surges to Multi-Year High
| Action Insight Mid-Day 6-12-25 |
Dollar Crushed as Dovish Inflation Data and Trade Tensions Weigh; Euro Surges to Multi-Year High |
Dollar accelerated its broad-based selloff in early US trading, plunging to its lowest level against Euro since 2021. The latest catalyst came from softer-than-expected May PPI data, which followed Wednesday’s downside surprise in CPI. The tandem inflation prints have further calmed fears of immediate tariff-driven price pass-through, at least for now, and are reinforcing expectations that Fed is moving closer to resume policy easing. As a result, market expectations for Fed easing have firmed up. Fed funds futures are now pricing in an 80% chance of a rate cut in September, up from around 75% just a week ago before the two inflation releases. The tone of both upstream and downstream price measures—despite the tariff backdrop—has strengthened the market’s conviction that Fed will deliver a cut before the fourth quarter, particularly as labor market data has also started to show signs of softening. Adding to Dollar’s woes is renewed uncertainty over US trade policy. While Treasury Secretary Scott Bessent floated the possibility of extending the current 90-day tariff truce with “good faith” trading partners, President Donald Trump struck a starkly different tone. Trump dismissed the need for any extension and hinted that countries would be unilaterally informed of their new tariff terms in the coming weeks. This reinforces fears that the US may revert to aggressive, one-sided trade actions just as the 90-day tariff truce nears expiration...... |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.1429; (P) 1.1465; (R1) 1.1524; More... EUR/USD's rally from 1.0176 resumed by accelerating through 1.1572 resistance. Intraday bias stays on the upside at this point. Next target is 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. On the downside, below 1.1504 minor support will turn intraday bias neutral and bring consolidations first, before staging another rise. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:01 | GBP | RICS Housing Price Balance May | -8% | -3% | -3% | | 23:50 | JPY | BSI Large Manufacturing Index Q2 | -4.8 | 0.8 | -2.4 | | 01:00 | AUD | Consumer Inflation Expectations Jun | 5.00% | 4.10% | | 06:00 | GBP | GDP M/M Apr | -0.30% | -0.10% | 0.20% | | 06:00 | GBP | Industrial Production M/M Apr | -0.60% | -0.40% | -0.70% | | 06:00 | GBP | Industrial Production Y/Y Apr | -0.30% | -0.20% | -0.70% | | 06:00 | GBP | Manufacturing Production M/M Apr | -0.90% | -0.80% | -0.80% | | 06:00 | GBP | Manufacturing Production Y/Y Apr | 0.40% | 0.40% | -0.80% | | 06:00 | GBP | Goods Trade Balance (GBP) Apr | -23.2B | -20.8B | -19.9B | | 12:30 | USD | PPI M/M May | 0.10% | 0.20% | -0.50% | -0.20% | | 12:30 | USD | PPI Y/Y May | 2.60% | 2.60% | 2.40% | 2.50% | | 12:30 | USD | PPI Core M/M May | 0.10% | 0.30% | -0.40% | -0.20% | | 12:30 | USD | PPI Core Y/Y May | 3.00% | 3.00% | 3.10% | 3.20% | | 12:30 | USD | Initial Jobless Claims (Jun 6) | 248K | 251K | 247K | 248K | | 14:30 | USD | Natural Gas Storage | 108B | 122B |
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