The euro held steady around $1.17, near its highest level since August 2021, as investors awaited updates on US-EU trade negotiations. The European Union aims to finalize a preliminary agreement with Washington this week to secure a 10% tariff framework beyond the August 1 deadline, while talks toward a permanent deal continue. On Tuesday, reports surfaced that the US proposed maintaining a 10% baseline tariff, with exemptions for key sectors such as aircraft and spirits. However, Washington has shown no willingness to extend exemptions to politically sensitive industries, including cars, steel, aluminum, and pharmaceuticals, despite requests from Brussels. In response, the EU is preparing retaliatory tariffs on various US goods and has warned that additional measures—such as export controls and restrictions on US companies' access to public contracts—could follow if no deal is reached. Meanwhile, in monetary policy, markets are pricing in just one more rate cut from the ECB this year.

Euro Steadies Near 4-Year High as EU, US Race to Finalize Trade Deal

The offshore yuan fell to around 7.18 per dollar on Wednesday, as investors reacted to the latest inflation data from China. Annual consumer prices rose 0.1% in June 2025, ending a three-month streak of 0.1% declines and beating market expectations of flat growth. Although consumer inflation modestly rebounded, the increase was minimal amid property sector stress and renewed tariffs from US President Donald Trump. Meanwhile, annual producer prices dropped 3.6%—worse than the anticipated 3.2% decline and steeper than May’s 3.3% fall. This marked the 33rd consecutive month of producer deflation and the sharpest drop since July 2023. The persistent decline in producer prices highlights mounting economic pressures as China struggles with weak domestic demand and uncertainty stemming from escalating global trade tensions. Externally, the yuan also came under pressure from a strengthening greenback amid intensified trade concerns following recent moves by the Trump administration.

Offshore Yuan Falls Amid Inflation Data

The Japanese yen slipped past 147 per dollar on Wednesday, marking its third consecutive session of losses as trade negotiations between the US and Japan showed signs of strain, particularly over Japan’s rice market protections. The decline followed US President Donald Trump’s announcement of a 25% tariff on Japanese goods, set to take effect on August 1. Trump emphasized that there would be no revisions or delays to the newly imposed tariffs, which target 14 countries in total. Japanese Prime Minister Shigeru Ishiba called the latest measures “truly regrettable,” but affirmed Japan’s commitment to continue talks with Washington in search of a mutually beneficial resolution. Meanwhile, Bank of Japan board member Junko Koeda noted the central bank is closely watching for potential second-round effects on core inflation, particularly from rising food prices including rice.

Japanese Yen Weakens as Tariff Tensions Deepen

The New Zealand dollar fell to around $0.598 on Wednesday, hovering near a two-week low, after the Reserve Bank of New Zealand paused its interest rate cutting cycle but signaled that further easing is likely if price pressures abate. The central bank held its official cash rate steady at 3.25% as widely expected, following six consecutive cuts since August 2024—when it implemented its first rate reduction since March 2020. The central bank has taken a more cautious stance amid lingering concerns about domestic inflation, which currently at 2.5%, and rising risks that global trade tensions could add to inflationary pressures. But at the same time, policymakers said they expect to continue lowering rates in line with the May forecasts, assuming medium-term inflation continues to ease. Markets also anticipate ongoing economic weakness will give the RBNZ room to deliver at least one more rate cut later this year.

New Zealand Dollar Falls After RBNZ Rate Decision

The South Korean won depreciated to around 1,373 per dollar on Wednesday, pulling back from the previous session’s gains as the dollar regained momentum following the latest trade measures. Investor sentiment wavered amid reports that new tariffs on pharmaceuticals and semiconductors are under consideration, adding to concerns over existing sectoral tariffs of up to 50% on steel and aluminum, and 25% on automobiles. Adding to trade-related anxieties, US President Trump announced a 50% tariff on copper imports, set to take effect by August 1, and is expected to impact the electronics and construction industries. Meanwhile, South Korean officials pledged to intensify negotiations with the Trump administration in a bid to swiftly resolve trade tensions.

Korean Won Declines as Tariff Risks Rise

The Australian dollar held its recent gains to around $0.653 on Wednesday, supported by the Reserve Bank of Australia’s surprise decision to maintain interest rates at 3.85% on Tuesday. The decision came as most board members opted to wait for clearer evidence of slowing inflation. RBA Governor Michele Bullock stated at a post-meeting conference that persistent inflation risks remain, driven by high labor costs and weak productivity, which may push inflation above current forecasts. RBA Deputy Governor Hauser added that the central bank is closely watching US tariff developments, citing high global uncertainty. In the latest trade development, Trump ruled out further extensions to tariffs set for August 1 and announced sweeping new penalties, including a 50% tariff on copper imports, potential 200% duties on pharmaceuticals, and a 10% levy on goods from BRICS nations. Elsewhere, mixed inflation data in China, Australia’s top trading partner, also limited sharp movements for the Aussie.

Australian Dollar Holds Ground

The US dollar index held steady above 97.5 on Wednesday, maintaining recent gains as investors weighed the latest tariff actions announced by President Donald Trump. The president confirmed that the newly imposed duties on 14 countries, set to take effect on August 1, would proceed without revisions or delays. Trump also unveiled a 50% tariff on copper imports and hinted at further sector-specific levies. In a more aggressive move, he threatened tariffs of up to 200% on pharmaceutical imports, though implementation would be delayed by 12 to 18 months to give the industry time to adjust. The dollar posted its strongest gains against the yen, amid growing pressure on Japan to secure a trade agreement with Washington. Market participants now turn their attention to the upcoming release of the FOMC minutes for further insights into the Federal Reserve's policy outlook.

Dollar Holds Gains as Investors Weigh Tariff Moves

The British pound fell below $1.36, hitting a two-week low, pressured by a stronger US dollar and concerns over the country’s fiscal outlook. US President Donald Trump warned 14 nations, including Japan and South Korea, of 25% tariffs effective August 1. So far, only the UK and Vietnam have reached deals to avoid the new levies, which are separate from existing tariffs on autos, steel, and aluminium. The UK is rushing to finalize a deal with the US to eliminate tariffs on British steel, with fears the levy could jump to 50%, threatening an already fragile domestic steel industry. At the same time, concerns over the UK’s fiscal health weighed on sentiment. The Office for Budget Responsibility (OBR) warned that public debt could exceed 270% of GDP by the early 2070s, citing pressures from an ageing population and rising healthcare and pension costs. Growing global tensions and calls for increased defence spending are also adding to the long-term fiscal uncertainty.

Sterling Falls to 2-Week Low

The dollar index rose to 97.7 on Tuesday, extending its rebound since touching the over-three-year low of 96.8 touched on July 2nd as markets assessed how the fresh wave of tariffs mandated by President Trump will impact capital flows and the outlook for fiscal and monetary policy. Trump placed aggressive tariffs on key Asian trading partners, including 25% levies on Japan and Korea in addition to sector specific tariffs on autos and metals that have a high impact on both economies, to be enforced on August 1st. The President also signaled that additional levies may be passed against countries that reciprocate to tariffs or mandate "anti-American policies of BRICS". The dollar gained the most against the yen due to lower foreign exchange demand in Japan following the tariffs. Last week, bets of a rate cut by the Fed this month were nearly erased following a strong jobs report.

Dollar Index Extends Rebound

The South African rand rose slightly toward 17.8 per USD, up from an over one-week low of 17.9 hit on July 7, lifted by hopes of a potential US trade deal after President Trump delayed new tariffs until August 1. He told President Ramaphosa that a 30% tariff would be imposed on all South African goods, but said the US remains open to cooperation if trade becomes more balanced. The announcement came hours after the US leader threatened to impose an additional 10% levy on all countries that form part of the BRICS economic bloc. The US is its second-biggest trading partner after China, and South Africa's automobile and farming sectors had duty-free access to the US market. South Africa is reportedly seeking to cap the tariff at 10% and is calling for key sectors—vehicles, farm products, auto parts, steel, and aluminum—to be excluded from the hikes.

South African Rand Firms

The Indian rupee strengthened past 85.7 in July, holding most of the rally from late June as the relative softness in energy prices and bullish momentum for the Indian economy outweighed the uncertain outlook for trade. Continued flows of tankers through the Persian Gulf into the Indian Ocean and another output increase by OPEC+ nations limited concerns of a sharp rebound in oil and fuel imports for India, preventing capital outflows as energy is India's largest import. In the meantime, strong indicators for the Indian economy maintained bets of strong growth domestically, with June's PMI coming at 61. This allowed the Indian rupee to hold its strength with the RBI still being able to build foreign exchange reserves, with the latest reading surpassing $700 billion, the highest om 10 months. On the other hand, uncertainty remained on tariffs by the US. The US refrained from imposing fresh tariffs in its latest letter round, but made levy threats against BRICS members.

Indian Rupee Holds Rally

The euro rose slightly above $1.175, nearing its highest level since August 2021, as trade tensions eased after news that the US had proposed a deal to the EU maintaining a 10% baseline tariff, with exemptions for sensitive sectors such as aircraft and spirits. The EU is aiming to finalize a preliminary agreement with the US this week to lock in the 10% rate beyond the August 1 deadline while negotiations continue toward a permanent deal. Investor sentiment also improved after President Donald Trump spared the EU from additional tariffs ahead of the initial July 9 deadline. Meanwhile, the EU announced it was preparing retaliatory tariffs on a range of US products in response to US metal duties. Officials warned that if an agreement isn’t reached, further actions—such as export controls and restrictions on US access to public contracts—could be implemented. On the monetary policy front, markets are now pricing in just one more rate cut from the European Central Bank this year.

Euro Nears 2021 High Amid Progress on US-EU Trade Deal

USDRUB decreased to 76.76, the lowest since May 2023. Over the past 4 weeks, US Dollar Russian Ruble lost 1.37%, and in the last 12 months, it decreased 9.92%.

Russian Ruble Hits 25-month High

The Japanese yen weakened past 146 per dollar on Tuesday, hitting a two-week low after US President Donald Trump announced a 25% tariff on Japanese goods, set to take effect on August 1. While lower than the earlier threat of a 35% levy, the new rate remains significantly higher than the baseline 10% tariff imposed on most countries, adding pressure on Tokyo to reach a trade deal with Washington. Japanese Prime Minister Shigeru Ishiba said Japan will continue negotiations with the US in pursuit of a mutually beneficial agreement. On the domestic front, Japan's current account surplus for May exceeded expectations, offering some support to sentiment. However, earlier data showing weaker-than-expected wage growth has dampened expectations for further interest rate hikes by the Bank of Japan, putting downward pressure on the yen.

Japanese Yen Falls as Trump Imposes 25% Tariff

The offshore yuan stabilized to around 7.17 per dollar on Tuesday, supported by a retreat in the US dollar after President Trump announced an updated round of tariffs targeting fourteen countries that have yet to finalize trade deals with Washington. The measures include a 25% levy on major exporters such as Japan and South Korea. Additionally, Trump signed an executive order delaying the start of reciprocal tariffs from July 9 to August 1. Meanwhile, sentiment toward the yuan was underpinned by reports that China is considering doubling the quota for the southbound leg of the Bond Connect scheme, a move that would expand domestic investors’ access to overseas bonds and support efforts to internationalize the currency. Also helping to steady the yuan, the People’s Bank of China set the daily reference rate at 7.1534 per dollar, slightly weaker than the previous fix but stronger than expected. Markets now await June CPI, which is expected to remain soft, along with PPI and trade data.

Offshore Yuan Stabilizes

The South Korean won rose to around 1,368 per dollar on Tuesday, rebounding from the previous session’s losses as investor uncertainty eased following the announcement of US trade measures, which ended weeks of ambiguous signaling with clearer policy direction. On July 7, US President Donald Trump further clarified the scope of the measures in letters addressed to Japan and South Korea, stating that a 25% tariff would be imposed on both countries. Investor sentiment improved following the extension of the tariff implementation deadline, amid hopes that the additional time may allow for constructive trade negotiations between the two nations. The newly announced tariffs are set to take effect on August 1 but will not be cumulative with previously imposed sector-specific duties, including those on automobiles, steel, and aluminum. Market participants are now closely watching for Seoul’s official response and any potential adjustments to trade or fiscal policy that may follow.

South Korean Won Rises on Eased Trade Uncertainty

The New Zealand dollar stabilized around $0.60 on Tuesday after four straight declines, as investors weighed trade-related risks to the export-driven currency. President Donald Trump issued the first of several planned tariff warning letters, with rates ranging from 25% to 40%, but signaled flexibility, calling the August 1 deadline “not 100% firm” and leaving room for further negotiations. On the domestic front, attention now turns to the interest rate decision on Wednesday, where the Reserve Bank is expected to keep rates steady, pausing for the first time after aggressively cutting rates since last August. The central bank had lowered the official cash rates by 225 bps from 5.5% to 3.25%, including three 50 bps cuts. Markets are currently anticipating at least one more 25 bps cut later this year due to downside risks to growth from the economic impact of US tariffs.

New Zealand Dollar Stabilizes

The US dollar index slipped below 97.5 on Tuesday, retreating from the previous session's gains after President Donald Trump announced updated tariff rates on 14 countries that have yet to secure trade deals with Washington. The list includes major exporters such as Japan and South Korea, both of which will face 25% levies. Trump also signed an executive order extending the reciprocal tariff deadline to August 1 from July 9, giving negotiators more time to reach agreements. In addition, he warned of an extra 10% tariff on countries aligning with what he described as the “Anti-American policies of BRICS,” as the bloc convened for a summit in Brazil. Despite Tuesday’s pullback, the dollar had strengthened on Monday amid easing trade concerns and reduced expectations for near-term interest rate cuts by the Federal Reserve. A stronger-than-expected US jobs report for June lessened the urgency for policy easing, with markets largely pricing out the likelihood of a rate cut in July.

Dollar Eases as Trump Announces New Tariffs

The Australian dollar rose to around $0.651 on Tuesday, rebounding from sharp losses in the previous session, supported by a weakening greenback. The US dollar came under pressure after President Donald Trump announced a new round of tariffs targeting fourteen countries that have yet to finalize trade agreements with Washington. The measures include a 25% tariff on key exporters such as Japan and South Korea. Moreover, Trump signed an executive order delaying the start of reciprocal tariffs from July 9 to August 1, further clouding the global trade outlook. In Australia, investors are now focused on the upcoming monetary policy decision, expected later today. Markets widely anticipate a 25 bps rate cut, bringing the cash rate down to 3.60% and marking the RBA’s third rate reduction this year. Investors will also be watching closely for the release of NAB’s June index on business confidence and conditions later today.

Australian Dollar Gains on Greenback Weakness

The US dollar index found renewed footing above the 97.5 mark on Monday as markets grappled with an escalating tariff offensive that President Trump confirmed would begin on August?1st. In a pair of Truth Social posts, he announced 25% duties on all Japanese and South Korean imports, adding to the broader reciprocal–tariff campaign that spares only those nations which have struck preliminary deals, and warned of an extra 10% levy on any country aligning with “anti-American” BRICS policies. Treasury Secretary Scott Bessent signaled that letters outlining tariff rates would continue to arrive in the coming days, heightening the sense of urgency for trading partners scrambling to negotiate exemptions. Meanwhile, upbeat US labor data, 147,000 payrolls in June versus 110,000 expected and a fall in unemployment, tempered fears of an imminent Fed rate cut.

DXY Extends Rebound

The Mexican peso slipped past 18.67 per USD after rallying to an August-2024 high of 18.63 on July?4th, as the US dollar strengthened following President Trump’s confirmation that reciprocal tariffs will take effect on August?1st. Nevertheless, Mexico’s external position remains robust as the cumulative January–May trade surplus expanded to over?$9?billion, including a $1.03?billion surplus in May alone, and June remittances climbed to a record $5.7?billion, shoring up foreign-exchange reserves. On the policy front, Banco de México’s June?26th decision to cut its benchmark rate by 50?basis points to 8%, while insisting further reductions hinge on clear disinflation, has preserved a generous real yield advantage that underpins peso demand. At home, labor markets and business activity continue to outperform regional peers as unemployment stands at a low 2.7%, and although June’s PMI eased to 46.3, it remains stronger than most in Latin America.

Mexican Peso Eases from August Highs

The Brazilian real slid past 5.47 per USD, giving back gains from its nine-month peak of 5.41 on July 3rd, as the US dollar has rallied on news that President Trump has pushed his reciprocal-tariff deadline out to August 1st, and threatened additional duties on BRICS-aligned nations, luring yield-seeking capital back to developed markets. At the same time, softening prices for Brazil’s cornerstone exports, crude oil and iron ore, have eroded hard-currency inflows, while a surprise widening of June’s trade deficit and an unexpected contraction in industrial production undermined earlier signs of a nascent recovery. However, the central bank’s 15% interest rate, maintained to rein in inflation now running above target, leaves scant room for further cuts and solidifies Brazil’s interest-rate edge, limiting downward pressure on the real.

Brazilian Real Retreats From 9-Month High

The Canadian dollar weakened past 1.36 per USD, backing off from eight-month highs as the greenback recovered from three-year lows as investors digested the latest around US reciprocal tariffs. What had been a July?9th deadline for tariff reinstatements on up to 70% of imports has now been pushed out to August?1st, giving negotiators more time but prolonging the cloud of potential duties on Canadian-made aluminum, lumber and other key exports. At home, Statistics Canada’s June data showed private-sector activity contracting for the seventh consecutive month and the merchandise trade gap widening, reinforcing a narrative of lopsided growth that could prompt the Bank of Canada to adopt a more dovish stance.

Canadian Dollar Gives up 8-Month Highs

The euro edged lower toward $1.17 on Monday afternoon, as investors awaited further clarity on upcoming US tariff measures. The European Union said it is making progress toward a trade agreement with the US, aiming to prevent a major tariff escalation through a preliminary deal that would impose a 10% universal tariff on many goods, with reduced rates for key sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft. However, the EU also announced preparations for retaliatory tariffs on a range of US products in response to President Trump’s metal duties. Officials warned that, if no agreement is reached, additional measures—such as export controls and restrictions on US access to public contracts—may follow. Meanwhile, Commerce Secretary Howard Lutnick confirmed that the broader US tariff package—initially slated for July 9—has been postponed to August 1. On the monetary policy front, markets are now pricing in just one more rate cut from the ECB this year.

Euro Slips as Markets Await US Tariff Details

The British pound fell to $1.362, a two-week low, amid growing concerns over the UK’s fiscal outlook. Chancellor Rachel Reeves hinted at possible tax hikes in the autumn budget to address a public finance gap, telling The Guardian she wouldn’t rule them out. This follows Labour’s retreat on welfare reforms to avoid internal rebellion, with Reeves admitting there were costs to those concessions. On monetary policy, markets still expect the Bank of England to cut rates by 25 basis points in September. Meanwhile, global trade tensions added to pressure after President Trump confirmed that new reciprocal tariffs will take effect August 1. Treasury Secretary Scott Bessent noted tariffs would revert to April 2 levels for countries without a deal by then. Trump also warned of an extra 10% tariff on nations supporting the "anti-American policies of BRICS".

The South African rand depreciated more than 1% to around 17.8 per USD, the lowest level since June 27, following remarks by US President Donald Trump threatening a 10% tariff on countries aligning themselves with the BRICS bloc. Trump also reiterated previous warnings of imposing tariffs of up to 100% on BRICS nations should they abandon the US dollar in bilateral trade, citing what he described as increasingly anti-American policies. He further warned other countries against joining the alliance. South Africa was already hit with a 10% tariff and an additional 30% duty on certain imports before a temporary pause for negotiations, and has since requested more time to finalize a trade deal with the Trump administration ahead of the July 9 deadline. In the meantime, South African President Cyril Ramaphosa is confronting a new internal crisis after a police official accused one of his ministers of interfering in an investigation into political assassinations.

South African Rand Weakens on Trump's Tariff Threat

The euro was little changed just below the $1.18 mark, hovering near its highest level since August 2021, as investors awaited clarity on the US administration’s upcoming tariff measures. President Trump is expected to send around twelve formal letters to trading partners later today, though it remains unclear whether EU nations will be among the recipients. Meanwhile, Commerce Secretary Howard Lutnick confirmed that the broader tariff package, originally set for a July 9 rollout, will now be delayed until August 1, offering temporary relief but extending uncertainty for importers. On the monetary policy front, markets now expect only one additional rate cut from the ECB this year. ECB officials have signaled that rates will likely be held steady at this month’s meeting following eight consecutive cuts since June 2024. With inflation aligning with the 2% target, policymakers are taking a cautious stance amid persistent global trade tensions and the euro’s recent appreciation.

Euro Steady Ahead of US Tariff Clarity

The offshore yuan slipped to around 7.17 per dollar on Monday, pulling back gains from the previous session, as caution built ahead of the US tariff deadlines. Market sentiment was dampened after President Trump confirmed new tariffs will take effect on August 1, not July 9. Treasury Secretary Bessent said countries without trade deals by then will face tariff levels reverting to those set on April 2. So far, only China, the UK, and Vietnam have reached partial trade agreements with Washington. The Chinese Commerce Ministry said the US and China are working to implement the London framework, with the US lifting export restrictions and China reviewing license applications for controlled items. Attention now turns to upcoming key economic releases, such June CPI and PPI data, after consumer prices fell for the fourth month in May and producer prices saw the steepest drop in nearly two years. Investors also hope for fresh stimulus signals from China’s Politburo meeting this month.

Offshore Yuan Slips on Trade Caution

The Japanese yen weakened toward 145 per dollar on Monday, reversing gains from the previous session, as disappointing wage data dampened expectations for further Bank of Japan rate hikes. Nominal wages rose just 1% year-on-year in May, well below market forecasts of 2.4% and marking a third consecutive month of slowdown. Real wages, a key gauge of consumer purchasing power, fell 2.9%—the sharpest drop in nearly two years and the fifth straight monthly decline. The broader wage figures have yet to reflect the record pay hikes negotiated during this year’s spring labor talks, as many smaller, non-unionized firms lag in implementation. The yen also faced additional pressure after Prime Minister Shigeru Ishiba stated on Sunday that he would not “easily compromise” in trade negotiations with Washington, as Japan seeks to avoid US tariffs of up to 35% on its exports.

Japanese Yen Slips After Weak Wage Data

The South Korean won weakened to around 1,365 per dollar on Monday, extending its decline for the fourth consecutive session amid heightened uncertainty over US trade policy, with tariffs on South Korean exports still pending. President Donald Trump’s administration is expected to send letters to several trade partners on Monday, outlining new and higher tariffs set to take effect on August 1, with Treasury Secretary Scott Bessent noting that countries without agreements by then will face the rates previously outlined on April 2. In a bid to prevent punitive measures, South Korea has stepped up diplomatic engagement. Following Trade Minister Yeo Han-koo’s visit to Washington on July 6, President Lee Jae-myung’s national security adviser, Wi Sung-lac, is also scheduled to visit the US this week for talks with Secretary of State Marco Rubio. Wi stated that consultations had entered a critical phase, prompting Seoul to intensify its diplomatic outreach.

SK Won Extends Fall on US Trade Policy Uncertainty

The New Zealand dollar fell to around $0.604 on Monday, hitting a two-week low, pressured by tariff concerns that threaten the country’s export-heavy economy. President Donald Trump confirmed that his sweeping reciprocal tariffs will take effect on August 1 and reiterated warnings that higher tariffs would target nations that fail to reach agreements. Treasury Secretary Scott Bessent echoed this, saying tariffs would revert to April 2 levels for countries without a deal. He also indicated a possible extension, noting that countries lacking an agreement by Wednesday may have an extra three weeks to continue discussions. At home, the Reserve Bank is widely expected to keep its cash rate at 3.25% this week, pausing for the first time after cutting rates at six consecutive meetings. Still, investors anticipate one or two more 25-basis-point cuts later this year due to downside risks to growth from the economic impact of US tariffs.

New Zealand Dollar Hits 2-Week Low

The Australian dollar weakened to below $0.653 on Monday, marking its third consecutive session of losses, pressured by mounting expectations of an RBA rate cut and renewed tariff concerns. Markets are now priced in at a 99.7% probability that the Reserve Bank of Australia will deliver a 25bps rate cut on Tuesday, its third cut this year. That would bring the official cash rate down to 3.6%, in response to easing inflation risks and a slowing domestic economy. Investors also grew cautious ahead of this week’s Fed meeting minutes, seeking clues on the central bank’s future policy direction. On the trade front, President Trump confirmed new tariffs will take effect on August 1, with final rates still under negotiation. Treasury Secretary Bessent said countries without trade deals by then will face tariff levels reverting to those set on April 2. Despite these pressures, analysts expect the Aussie to remain stable due to its dependence on the gradually recovering Chinese economy.

Aussie Dollar Down for 3rd Session

The US dollar index hovered around 97 on Monday, holding steady after President Donald Trump confirmed that his sweeping reciprocal tariffs will take effect on August 1. Treasury Secretary Scott Bessent stated the tariffs would revert to April 2 levels for countries that have not reached a trade agreement with the US by then, effectively giving trading partners more time to renegotiate terms. So far, only China, the UK, and Vietnam have secured some form of deal with Washington. Last week, the dollar fell to its lowest level in over three years, pressured by rising tariff risks, mounting fiscal concerns, and expectations of deeper Federal Reserve rate cuts. However, stronger-than-expected US jobs data helped ease those worries. The economy added 147,000 jobs in June, surpassing forecasts of 110,000 and slightly up from May’s 144,000, tempering recession fears and reducing immediate pressure on the Fed to lower rates further.

Dollar Holds Steady as Tariff Deadline Moved

The Mexican peso strengthened past 18.65 per USD in July, its strongest level since mid-August 2024, driven by stronger external inflows, a softer US dollar and a still-restrictive domestic monetary stance. Externally, June’s unexpectedly large US fiscal package and Trump’s looming tariff deadline have dented the dollar, while Mexico’s trade surplus of $1.03 billion in May, and record remittances topping $5.5 billion have kept hard currency flowing into the country. Domestically, Banxico’s June 26th decision to cut its key rate by 50 bps to 8%, while reiterating that further reductions will await solid disinflation, has preserved an attractive real interest rate, anchoring peso-yield differentials. Moreover, with unemployment at a decade-low 2.7% and Mexico’s PMI at 46.3 in June still outpacing most of the region, the peso has benefited from resilient growth indicators.

Mexican Peso Strengthens to August 2024 Highs

The Swiss franc strengthened to around 0.79 per USD, its highest level since July 2011, as the dollar came under pressure from renewed concerns over US trade policy and growing fiscal jitters. US President Donald Trump said that his administration will begin sending letters to all its trading partners without a deal in place before 9 July, the end of a 90-day pause on Trump’s “reciprocal tariffs”. The franc also drew strength from receding bets on further SNB rate cuts, prompted by the latest upside surprise in inflation figures. Swiss CPI rose 0.1% year-on-year in June, rebounding from a 0.1% decline and defying expectations for another drop, bringing inflation back within the SNB’s 0-2% target range and signaling renewed stability. SNB officials are expected to keep the interest rate unchanged at 0% in September, with many analysts anticipating it will remain at that level through 2026.

Swiss Franc Back to 2011-Highs

The euro held steady just below the $1.18 mark, remaining close to its strongest level since August 2021, as investors shifted their attention to recent trade developments and signals from ECB policymakers. US President Trump announced that Washington would begin sending formal notices to trading partners outlining tariff rates for exports to the US, shifting from earlier promises of multiple bilateral deals before the July 9 deadline, when tariffs are set to rise. Meanwhile, the EU expressed openness to a trade agreement with the US, while simultaneously preparing for the possibility that no deal will be reached. On the monetary front, markets now expect just one more ECB rate cut this year. Officials signaled rates will likely remain unchanged at this month’s meeting after eight straight deposit rate cuts since June 2024. With inflation hitting the ECB’s 2% target, policymakers are showing caution amid ongoing global trade risks and the euro’s recent strength.

Euro Steadies Below $1.18 as Trade Risks Loom and ECB Pauses

The Japanese yen appreciated toward 144 per dollar on Friday, recouping losses from the previous session as stronger-than-expected economic data reinforced expectations of a more hawkish stance from the Bank of Japan. Household spending jumped 4.7% year-over-year in May, sharply rebounding from a 0.1% decline in April and beating forecasts for a 1.2% gain. The increase reflects Tokyo’s intensified efforts to stimulate domestic consumption. The yen also drew support from a softer US dollar, which weakened as renewed concerns over tariff policy weighed on sentiment. President Donald Trump announced plans to begin issuing letters on trade matters, potentially setting unilateral tariff rates. Trump has previously threatened to impose tariffs of up to 35% on Japanese goods, citing dissatisfaction with Japan’s limited purchases of American rice and automobiles.

Japanese Yen Rises on Solid Domestic Data

The US dollar index slipped below 97 on Friday, snapping a two-day rally as renewed concerns over trade policy weighed on sentiment. President Donald Trump announced plans to begin issuing letters on trade matters, potentially setting unilateral tariff rates ahead of the July 9 negotiation deadline—injecting fresh uncertainty into global markets. At the same time, the House of Representatives passed Trump’s sweeping tax cuts and spending bill, which now heads to the White House. The legislation is projected to expand the federal budget deficit by over $3 trillion, adding to longer-term fiscal risks. Meanwhile, the US economy added 147,000 jobs in June, beating expectations of 110,000 and marking an increase from May’s 144,000. The data helped ease recession concerns and reduced pressure on the Federal Reserve to cut interest rates in the near term.

Dollar Slips on Renewed Tariff Concerns

The South Korean won weakened to around 1,365 per dollar on Friday, extending its downward trend as it tracked broader dollar strength following a stronger-than-expected US nonfarm payrolls report which reduced expectations for Fed rate cuts. While South Korea posted a solid current account surplus of $10.14 billion in May, fundamentally supportive of the won, it was outweighed by global USD strength. On the trade front, uncertainty continues to weigh on sentiment ahead of the July 9 US tariff deadline. Trade Minister Yeo is scheduled to visit Washington this weekend in a last-minute push to secure an extension of the current three-month pause. The outcome of the talks is critical, as it could impact key exports and add further pressure on the KRW.

South Korean Won Falls on Dollar Strength

The Japanese yen traded near 145 per dollar on Friday after falling nearly 1% in the previous session, weighed down by trade-related uncertainties despite Tokyo’s efforts to secure a deal with Washington ahead of next week’s deadline. US President Donald Trump announced plans to begin sending formal letters on trade tariffs as early as today, potentially signaling new tariff rates or extensions of existing deadlines. He has previously threatened to raise tariffs on Japanese goods to as much as 35%, citing Japan’s limited imports of American rice and automobiles. Adding to the yen’s weakness, the US dollar strengthened following a stronger-than-expected June jobs report, which eased recession fears and reduced expectations of imminent rate cuts by the Federal Reserve. On the domestic front, data showed that household spending in Japan rebounded more than anticipated in May, supported by government measures to stimulate consumption.

Japanese Yen Holds Decline on Trade Concerns

The New Zealand dollar held its recent decline to around $0.606 on Friday, amid broad US dollar strength following a robust US jobs report that dampened hopes of a Federal Reserve rate cut in July. Trade uncertainty also weighed on sentiment, with a US tariff deadline approaching on July 9. President Donald Trump on Thursday announced that letters specifying tariff rates on imports to the US would begin being sent out on Friday, signaling a shift from earlier pledges to negotiate individual trade deals. Domestically, the Reserve Bank of New Zealand is widely expected to keep its cash rate steady at 3.25% next week, although investors still expect one or two additional 25bps cut later this year amid concerns over the economic impact of US tariffs. Despite recent pressure, the Kiwi has edged up 0.2% so far this week, on track for its second consecutive weekly gain.

New Zealand Dollar Holds Decline

The Australian dollar held around $0.657 on Friday, hovering near eight-month highs, despite widespread expectations that the RBA will implement its third interest rate cut of the year at its July 8 monetary policy meeting. The central bank is expected to lower rates by another 25 basis points amid cooling inflation and a weakening economic outlook. Inflation stood at 2.4% in Q1 2025, remaining at its lowest level since early 2021 and still within the RBA’s 2–3% target range. Meanwhile, GDP grew just 0.2% in Q1, down from 0.6% in Q4 2024. Economists and markets initially expected three RBA rate cuts this year but raised their forecasts to four in May, and now anticipate up to five, driven by faster-than-expected disinflation and signs of economic weakness. Still, despite growing expectations of deeper rate reductions, the Australian dollar has risen more than 6% year-to-date, buoyed by broad-based weakness in the US dollar.

Australian Dollar Holds Near 8-Month High

The US dollar index held above 97 on Friday after rising for two straight sessions, as a stronger-than-expected June jobs report eased concerns over an economic slowdown and reduced pressure on the Federal Reserve to cut interest rates. The US economy added 147,000 jobs in June, up from 144,000 in May and well above market expectations of 110,000. At the same time, the unemployment rate unexpectedly fell to 4.1%, defying forecasts of an uptick to 4.3%. On the trade front, President Donald Trump is reportedly preparing to announce new tariff rates or a possible extension of the July 9 deadline for targeted countries, providing additional support to markets. Meanwhile, the House of Representatives passed Trump’s sweeping tax cuts and spending package, which now heads to the White House for his signature. The bill is projected to widen the federal budget deficit by over $3 trillion.

Dollar Firms on Strong Jobs Report

The British pound gave back early gains to slip back toward $1.36, its weakest level since June 23, as investors rushed to the dollar following a stronger-than-expected US jobs report. Earlier in the session, sterling had been supported after Prime Minister Keir Starmer defended Chancellor Rachel Reeves amid speculation about her future, affirming she would remain chancellor “for a very long time to come.” This helped ease concerns that a potential replacement might adopt a looser fiscal stance with increased borrowing. On the monetary policy front, markets have priced in a Bank of England rate cut as soon as August, following dovish remarks from officials. Governor Bailey said it was too early to fully assess the inflationary impact of tariffs but reiterated that the trajectory of interest rates is “downwards.” Meanwhile, BoE policymaker Alan Taylor urged faster rate cuts, warning of a heightened risk of a hard landing for the UK economy.

Pound Slides as Strong US Jobs Report Boosts Dollar

The Swiss franc weakened to around 0.80 per USD, as the dollar rebounded following a stronger-than-expected US jobs report, which eased economic concerns and led investors to scale back Fed rate cut expectations, despite ongoing trade uncertainty. At home, June’s inflation report tempered expectations for further SNB easing. Consumer prices rose 0.1%, reversing May’s decline and reaching a three-month high, aligning with the SNB’s 0–2% target. After cutting rates to zero in June to curb franc inflows, policymakers are likely to hold steady in September. Most analysts expect rates to remain at 0% through 2026, with inflation set to rise on food and wage pressures. Officials have recently warned against going below zero, citing risks to savers, banks, and pension funds.

Swiss Franc Loses Ground

The euro slipped toward $1.17, retreating from a recent four-year high, as investors flocked to the dollar in response to a stronger-than-expected US jobs report. At the same time, markets digested comments from European Central Bank policymakers and the minutes from the ECB’s latest policy meeting. Speaking at the ECB Forum on Central Banking, President Christine Lagarde welcomed the June inflation print, which aligned with the central bank’s 2% target, but cautioned about “two-sided risks” linked to rising geopolitical tensions and increasing economic fragmentation. Other ECB officials signaled that interest rates are likely to be kept on hold at this month’s meeting, following eight consecutive cuts to the deposit rate since June 2024, amid persistent concerns over global trade uncertainty, instability in the Middle East, and the euro’s recent appreciation. Markets are now pricing in only one additional rate cut before year-end.

Euro Falls as Strong US Jobs Report Boosts Dollar

The dollar index climbed above 97.3 after a stronger-than-expected June jobs report helped ease concerns over the health of the US labor market, despite lingering uncertainty surrounding trade policy. The US economy added 147,000 jobs in June, up from 144,000 in May and well above market forecasts of 110,000. Meanwhile, the unemployment rate unexpectedly dipped to 4.1%, defying expectations of a rise to 4.3%. Average hourly earnings increased by 0.2%, slightly below the projected 0.3%. On the fiscal front, the House of Representatives cleared a key hurdle toward passing President Trump’s sweeping tax and spending bill, which is set for a final vote in Congress. The legislation is projected to expand the US budget deficit by over $3 trillion. Markets also remained focused on trade developments, as the Commerce Department is expected to release updates on new trade deals ahead of the July 9 deadline for the reimposition of the controversial "Liberation Day" tariffs.

Dollar Rises as Strong Jobs Report Eases Labor Market Fears

The dollar index held below 97 on Thursday, not far from three-year lows, as markets awaited key economic developments gauge on their impact in monetary and fiscal developments. Markets tempered expectations of hot jobs numbers after ADP figures unexpectedly showed a decline in private-sector jobs, potentially driving the Fed to expedite its resumption of rate cuts. In the meantime, House representatives cleared a hurdle to pass President Trump's tax and spending bill, due for Congress approval and set to widen the US budget deficit by over $3 trillion. Lastly, market also awaited updated on new trade deals by the Commerce Department ahead of July 9th's deadline for the reintroduction of Liberation Day tariffs. Tariffs on Vietnam were lowered to 20% from 46%, but reports indicated that negotiations with other major trading partners faced roadblocks. In the meantime, the DXY received support from a softer pound as uncertainty on the UK's fiscal policy pressured British markets.

DXY Holds Near 3-Year Lows Ahead of NFP, Tax Bill

The Turkish lira continued to weaken in July, trading around a fresh record low of 39.9 per US dollar, as the central bank maintained tight control over the currency while allowing a gradual depreciation. Since Simsek was appointed finance minister in 2023, he has spearheaded a shift toward more orthodox policies aimed at reducing inflation and restoring investor confidence. The central bank raised interest rates to 50% in March 2024 and maintained that level until December, when it began cutting them. The policy rate now stands at 46%. Meanwhile, inflation fell to 35.05% in June 2025, the lowest since November 2021 and the GDP expanded just 2% yoy in Q1 2025, the weakest performance since the 2020 contraction. At the same time, authorities have been working to normalize policies. The stock of FX-protected deposits, known as KKM, has declined significantly, and the finance ministry said it plans to phase out the program soon, signaling renewed trust in the Turkish lira.

Gradual Slide in Turkish Lira Persists

The Swiss franc traded around 0.79 per USD, holding close to July 2011-highs, amid a subdued dollar and waning expectations of rate cuts by the Swiss National Bank. Swiss consumer prices increased 0.1% in June, reversing May’s decline and hitting a three-month high, aligning with the SNB’s 0-2% inflation target and pointing to renewed stability. This development is likely to offer some relief to policymakers, who responded to significant franc inflows with another interest-rate cut in June to zero.

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