A decrease of the indicator value may contribute to the fall in quotes of USD.
A decrease of the indicator value may contribute to the fall in quotes of USD.
Bloomberg reports that market participants are scaling back their projections for Federal Reserve’s rate cuts this year. Investors are currently placing only one reduction before the end of the year in their forecasts, abandoning previous more aggressive expectations.
The May US jobs report showed a gain of 139,000 positions. However, significant downward revisions to previous months' data have tempered optimism. Samuel Tombs of Pantheon Macroeconomics suggests May's figures may also overstate the true health of the US labor market.
Morgan Stanley strategists anticipate a decline in two-year inflation expectations following May CPI data releases. Their projections suggest the reading may fall below economist forecasts, potentially weighing on near-term market prospects.
ECB Governing Council member Yannis Stournaras compared the unpredictable US trade policy with the balanced approach of the region’s officials. In an interview with Handelsblatt, he also noted the euro’s chances to strengthen because of the weakening dollar.
Bloomberg says sentiment among small business owners in the US rose in May for the first time in 2025. Companies grew more positive about the country’s economic outlook.
Economists surveyed by Bloomberg expect May’s US core inflation figures to show an increase, partly driven by moderate effects of import tariffs. Meanwhile, price hikes for certain services, such as airfares, likely eased or even turned negative.
Citigroup experts have revised their outlook on the scale and timing of rate cuts in the United States. If previously analysts assumed a reduction in borrowing costs by 100 basis points within four meetings in 2025, now they suggest a reduction of only 75 basis points.
On Wednesday, US inflation data for May will be published. According to Dow Jones Newswires and The Wall Street Journal surveys, last month's Consumer Price Index (CPI) likely rose to 2.4%. The April reading stood at 2.3%.
According to a Chief Executive Group survey of more than 270 US CEOs, fears of a looming recession in the US economy have eased. As indicated by the latest data, only 30% of respondents anticipate a recession within the next six months.
According to the survey published this week by the Federal Reserve Bank (Fed) of New York, Americans are growing less worried about inflation. Poll data cited by Reuters also indicated improved sentiment among US citizens on their financial wellbeing last month.
The dollar is the monetary unit of the United States (US). It is also used as the official currency by some other countries (Ecuador, Zimbabwe, El Salvador). The dollar holds a leading position in the world economy.
At the moment, the dollar dominates the system of international settlements with almost 50% share (the euro ranks second with less than 25%). Meanwhile, the dollar's dominance is even more pronounced in the financial sector, on the foreign exchange market, and in the government reserves.
The US currency (USD) quotes, as well as those of its foreign counterparts, depend primarily on the economic and political situation in the issuing country. The US authorities, such as the Federal Reserve System (the Fed) and the Department of the Treasury, influence the dollar exchange rate by changing their monetary, fiscal, budget, and tax policies.
Moreover, the value of the dollar may be significantly affected by the latest news and the international situation. Global economic problems and rising geopolitical tensions have historically been favorable for the US currency, as investors consider it one of the major safe-haven assets, along with gold. In contrast, during periods of strong economic growth and a relatively calm global environment, the demand for the dollar tend to reduce.