FxGlobalHub: Forex market update daily and trading on news: Significant room for FED to cut interest rates

The U.S. Labor Department’s Consumer Price Index (CPI) report showed that inflation cooled more than analysts had forecasted, reinforcing confidence that inflation is on the right track and supporting hopes that the Federal Reserve may cut interest rates later this year.

In the latest tariff developments, Trump imposed a 25% tariff on imported steel and aluminum, prompting retaliatory measures from Canada and Europe, which increased tariffs on U.S. exports. This trade tension weighed on U.S. stocks, sparking concerns that economic shocks could push the U.S., Canada, and Mexico into a recession.

Treasury Yields and Currency Markets

U.S. Treasury yields edged higher as investors assessed the potential impact of tariffs on inflation.

• 10-year Treasury yield: 4.316%
• 30-year Treasury yield: 4.6355%
• 2-year Treasury yield: 3.991% (+5 basis points), reflecting expectations of Fed policy shifts.
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The U.S. Dollar Index (DXY) rose 0.13% to 103.57, rebounding slightly after recent losses but remaining under pressure from geopolitical and trade developments.

• EUR/USD fell to 1.0891, after hitting a five-month high on Tuesday on hopes of a ceasefire between Ukraine and Russia.
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• USD/JPY climbed 0.38% to 148.33 as the Japanese yen weakened.
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• The European Commission announced a €26 billion retaliatory tariff package on U.S. goods.
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• The Bank of Canada (BoC) cut interest rates by 25 basis points to 2.75%, aiming to mitigate the negative impact of U.S. tariffs.
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• The Russian ruble (RUB) dropped 1.75%, despite reaching a six-month high earlier in the week, as ceasefire negotiations showed no clear progress.
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Oil, Gold, and Commodity Markets

Crude oil prices rose on Wednesday after U.S. government data showed that crude and fuel inventories increased at a slower pace than expected, indicating tightening supply.

• - Brent crude: +2% to $70.95 per barrel
• - U.S. WTI crude: +2.16% to $67.68 per barrel
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However, concerns remain about the impact of tariffs on global economic growth.

Gold prices also advanced amid market uncertainty, with investors seeking safe-haven assets.

• - Spot gold: +0.53% to $2,931.59 per ounce
• - U.S. gold futures: +0.74% to $2,934.40 per ounce
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