Eurozone inflation matches estimates in June
The eurozone's consumer prices rose 2.0% y/y in June, matching expectations, and up slightly from 1.9% in the previous reading.
Excluding food and energy prices, inflation rose 2.3% last month as expected, same as the previous reading.
Euro rises above $1.18 for first time in four years ahead of European inflation data
The euro rose in European trade on Tuesday, on track for the ninth daily profit in a row against the US dollar, and trading above $1.18 for the first time since 2021.
It comes amid concerns about the Federal Reserve’s independence and US financial stability after new attacks by Trump against Powell.
Recently, the odds of a European Central Bank’s interest rate cut in July tanked, with investors now awaiting eurozone inflation data later today.
The Price
The EUR/USD price rose 0.2% today to $1.1807, the highest since September 2021, with a session-low at $1.1774.
On Monday, the euro rose 0.5% against the dollar, the eighth daily profit in a row, marking the longest such streak of daily gains this year.
In June, the euro rose 3.9%, the sixth monthly profit in a row after massive German stimulus plans.
US Dollar
The dollar index fell 0.3% on Tuesday, sharpening losses for the seventh straight session and plumbing a three-year nadir at 96.61 against a basket of major rivals.
US President Donald Trump’s recent tax bill raised concerns about the financial stability of America, with ongoing uncertainty as well about US trade deals.
Investors are now betting on a faster pace of Fed rate cuts this year, while waiting for crucial US data this week, including the payrolls report on Friday.
Trump continued to pressure the Federal Reserve to cut interest rates, and sent Fed Chair Powell a list of interest rates by global central banks, saying that US rates should be between the 0.5% Japanese rate and the 1.75% Danish rate.
European Rates
ECB President Christine Lagarde hinted at the possible end of the current cycle of policy easing, which was in response to a combined shock such as the Covid 19 pandemic, the Ukrainian war, and the energy crisis.
According to a Reuters source, most ECB members now aim at holding interest rates unchanged in July, with the global markets now expecting just an additional 25 basis points of rate cuts by the end of the year.
The odds of a 0.25% ECB rate cut in July now stood below 30%, with traders awaiting more eurozone data and remarks by ECB officials to gather more clues.
European Inflation
Later today, eurozone inflation data is expected to show a 2% increase in June, up from 1.9% in May, while core prices are expected up 2.3%.
Yen extends gains to three-week high against the dollar
The yen rose in Asian trade on Tuesday against a basket of major rivals, expanding gains for the second straight session against the dollar and hitting a three-week high against a basket of major rivals.
The odds of a Japanese interest rate hike in July tumbled following the Bank of Japan’s latest policy meeting, with traders now awaiting more Japanese labor and inflation data to gather clues.
The Price
The USD/JPY price fell 0.4% today to 143.43, the lowest since June 13, with a session-high at 144.05.
The yen rose 0.45% on Monday against the greenback, the second profit in three days.
US Dollar
The dollar index fell 0.3% on Tuesday on track for the seventh straight loss in a row, plumbing three-year lows at 96.61 against a basket of major rivals.
US President Donald Trump’s recent tax bill raised concerns about the financial stability of America, with ongoing uncertainty as well about US trade deals.
Investors are now betting on a faster pace of Fed rate cuts this year, while waiting for crucial US data this week, including the payrolls report on Friday.
Trump continued to pressure the Federal Reserve to cut interest rates, and sent Fed Chair Powell a list of interest rates by global central banks, saying that US rates should be between the 0.5% Japanese rate and the 1.75% Danish rate.
Japanese Rates
The odds of a Bank of Japan’s 0.25% interest rate hike in July is still below 40%.
Now investors await more clues from Japan this week to form a more accurate prediction.
Oil marks monthly profit but quarterly loss
Oil prices dropped on Monday as tensions receded in the Middle East with increasing speculation about a potential OPEC+ production hike in August.
Recent EIA data showed US crude output hit a record high in April at 13.47 million barrels, up from 13.45 million in March, pressuring prices.
On trading, Brent August futures fell 0.2%, or 16 cents to $67.61 a barrel, with a monthly profit of 5.8%, and a quarterly loss of 8.2%.
US crude August futures fell 0.6%, or 41 cents to $65.11 a barrel, with a monthly profit of 6.9%, and a quarterly loss of 6.33%.