Dollar Extends Decline as Markets Starting to Embrace Three Fed Cuts in 2025
| Action Insight Mid-Day 7-1-25 |
Dollar Extends Decline as Markets Starting to Embrace Three Fed Cuts in 2025 |
Dollar's slide deepened today as markets leaned harder into expectations of multiple Fed rate cuts in 2025. The move comes even before this week’s key economic data—ISM manufacturing, ISM services, and non-farm payrolls—hits the wires. The greenback’s decline is broad-based, with risk currencies like the New Zealand Dollar and safe havens such as Yen and Swiss Franc outperforming at the same time. Goldman Sachs now forecasts three rate cuts this year, reversing its earlier call for a single reduction. The shift stems from what it described as “smaller-than-expected” impacts from US tariffs and stronger-than-expected disinflation. Analysts noted that some gauges of household inflation expectations had previously raised concerns, but early signs suggest those pressures may not warrant delaying cuts. The call aligns with market pricing, which now shows a over 96 chance of a September cut and around 65% odds of three total moves. Alongside monetary policy, fiscal worries are creeping into investor sentiment too. The Senate is expected to vote today on US President Donald Trump’s expansive “Big Beautiful Bill,” a package of tax cuts and spending boosts that would widen the US fiscal deficit by US 3.3 trillion. Treasury Secretary Scott Bessent expressed optimism on the bill’s passage, but questions linger about its long-term economic sustainability, particularly in the context of slower growth and aggressive tariffs...... |
USD/CHF Mid-Day Outlook Daily Pivots: (S1) 0.7908; (P) 0.7951; (R1) 0.7974; More…. USD/CHF's decline is in progress and break of the near term falling channel suggests downside acceleration. Intraday bias stays on the downside for 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757. Firm break there will pave the way to 100% projection at 0.7313 next. On the upside, above 0.7959 minor resistance will turn intraday bias neutral first. But recovery should be limited by 0.8054 support turned resistance to bring another fall. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 22:00 | NZD | NZIER Business Confidence Q2 | 22 | 19 | | 22:45 | NZD | Building Permits M/M May | 10.40% | -15.60% | -14.60% | | 23:01 | GBP | BRC Shop Price Index Y/Y Jun | 0.40% | -0.10% | | 23:50 | JPY | Tankan Large Manufacturing Index Q2 | 13 | 10 | 12 | | 23:50 | JPY | Tankan Large Manufacturing Outlook Q2 | 12 | 9 | 12 | | 23:50 | JPY | Tankan Non - Manufacturing Index Q2 | 34 | 34 | 35 | | 23:50 | JPY | Tankan Non - Manufacturing Outlook Q2 | 27 | 29 | 28 | | 23:50 | JPY | Tankan Large All Industry capex Q2 | 11.50% | 3.10% | | 00:30 | JPY | Manufacturing PMI Jun F | 50.1 | 50.4 | 50.4 | | 01:45 | CNY | Caixin Manufacturing PMI Jun | 50.4 | 49 | 48.3 | | 05:00 | JPY | Consumer Confidence Index Jun | 34.5 | 33.6 | 32.8 | | 06:30 | CHF | Real Retail Sales Y/Y May | 0.00% | 0.80% | 1.30% | | 07:30 | CHF | Manufacturing PMI Jun | 49.6 | 44.2 | 42.1 | | 07:50 | EUR | France Manufacturing PMI Jun F | 48.1 | 47.8 | 47.8 | | 07:55 | EUR | Germany Manufacturing PMI Jun F | 49 | 49 | 49 | | 07:55 | EUR | Germany Unemployment Change May | 11K | 18K | 34K | | 07:55 | EUR | Germany Unemployment Rate May | 6.30% | 6.40% | 6.30% | | 08:00 | EUR | Eurozone Manufacturing PMI Jun F | 49.5 | 49.4 | 49.4 | | 08:30 | GBP | Manufacturing PMI Jun F | 47.7 | 47.7 | 47.7 | | 09:00 | EUR | Eurozone CPI Y/Y Jun P | 2.00% | 2.00% | 1.90% | | 09:00 | EUR | Eurozone CPI Core Y/Y Jun P | 2.30% | 2.30% | 2.30% | | 13:45 | USD | Manufacturing PMI Jun F | 52 | 52 | | 14:00 | USD | ISM Manufacturing PMI Jun | 48.8 | 48.5 | | 14:00 | USD | ISM Manufacturing Prices Paid Jun | 70.2 | 69.4 | | 14:00 | USD | ISM Manufacturing Employment Index Jun | 46.8 | | 14:00 | USD | Construction Spending M/M May | -0.10% | -0.40% |
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