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A major signal to the global foreign exchange market! , wait for US economic data
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: Major Signals in the Global Foreign Exchange Market!, Waiting for US Economic Data". Hope it will be helpful to you! The original content is as follows:
On July 1, during the Asian session on Tuesday, gold trading around $3,311/ounce, gold prices rose slightly on Monday, helped by the weakening of the US dollar, investors were waiting for U.S. economic data later this week to assess the Fed's policy direction; U.S. crude oil trading around $65/barrel, and as tariffs ease boost demand, investors weighed the mitigation of risks in the Middle East and the possible increase in OPEC+ in August.
The presidents of major central banks around the world (Feder Chairman Powell, ECB President Lagarde, BOE Governor Bailey, BOJ Governor Kazuo Ueda, and BOK Governor Lee Changyong) held a group meeting; the ECB held a central bank forum in Sintra.
U.S. Senate Republicans will work to pass President Trump's www.xmh100.comprehensive tax cuts and spending bill, despite party disagreements over the bill that is expected to increase national debt by $3.3 trillion.
Amo Sahota, executive director of foreign exchange consulting firm KlarityFX, said, "Everyone is very concerned about this large-scale, huge bill and whether it can be passed, and the dollar has been on a weak trend. It is halfway through this year, with the biggest winners being the Swedish kroner, Swiss franc and the euro. The fate of the euro zone has reversed after an announcement of a huge spending bill."
According to Bloomberg News on Monday, the EU is willing to reach a trade agreement with the United States to impose a 10% universal tariff on its multiple exports, but is seeking the United States' www.xmh100.commitment to lower tariffs in key areas such as medicines, alcohol, semiconductors and www.xmh100.commercial aircraft.
U.S. Treasury Secretary Bescent warned on Monday that even if countries negotiate in sincerity, they may still face a significant increase in tariffs on July 9, he addedAny possible extension will be decided by President Trump, the president said.
Moneycorp North American structural director Eugene Epstein said, "The dollar weakens due to the potential for a substantial increase in the U.S. budget deficit, and uncertainty surrounding these tariff agreements continues," said Trump. "There are trade letters that Japan and other countries will receive trade letters that state the tariffs that need to be paid to the U.S.."
Asian Market
China's Caixin Manufacturing Purchasing Managers Index rose from 48.3 to 50.4 in June, higher than expected 49.0, marking a return to the expansion field. However, Wang Zhe of Caixin Insight warned that unemployment continues, external demand remains weak, and price pressure is suppressed.
Although the latest data suggests a recent stabilization, the potential risks are still high. Wang stressed that domestic demand has not yet improved fundamentally and enterprises have become less optimistic. Global uncertainty is intensifying as logistics and procurement activities remain weak, and the sustainability of the June rebound remains questionable unless further policy support or demand recovery.
Japan's manufacturing purchasing managers index ended at 50.1 in June, up from 49.4 in May. While production and employment have increased, potential demand remains weak.
According to S&PGlobal's AnnabelFiddes, the www.xmh100.company reports that domestic and overseas sales continue to decline, reflecting the lingering impact of global uncertainty, especially around the impact of U.S. tariff policies.
Business sentiment has improved despite weak demand, encouraging www.xmh100.companies to increase output and recruitment. However, Fiddes stressed that there is still a need for “renew and continuous improvement in customer demand” to drive a broader recovery.
Price pressure also "slightly rises", with both input costs and sales prices above the long-term average, indicating that inflation risks still exist in the supply chain.
A short-term survey in the second quarter showed that despite the intensification of trade tensions, business sentiment remained strong. While today’s short-term strike won’t trigger immediate action, it opens the door for the Bank of Japan to change its interest rate hike policy by the end of the year, especially when trade risks are stable.
The overall index released by large manufacturers is +13, surpassing expected 10 and reaching the highest level since December 2024. Their forward-looking outlook for September is +12, which is also higher than the forecast of 9. The service aspect is even more www.xmh100.complicated. Large non-manufacturers stocks were stable at +34, in line with expectations, but this marked a weaker www.xmh100.comparison with previous readings, with September outlook falling to +27.
Nevertheless, the capital expenditure plan is unexpectedly upward: Big www.xmh100.companies expect capital expenditure to grow by 11.5% (expected at 10.0%) in fiscal 2025/26, while smaller www.xmh100.companies have slightly less pessimism. Investment data show that people are confident in the domestic recovery.
Inflation expectations remain roughly stable. Enterprise expected CPI will rise 2.4% in both one and three years, the same as or slightly lower than the last survey.
According to a quarterly survey by NZIER, business confidence in New Zealand improved slightly in the second quarter, with net 22% of businesses expecting better future conditions, up from 19% in the first quarter.
Inflation pressure seems to be cooling down. 1% of businesses reported a price cut in the second quarter, a sharp drop www.xmh100.compared to 8% in the first quarter.
The report notes that “there is an ongoing disagreement between firms with weak demand and firms with expected recovery in demand”, highlighting that the domestic outlook remains unbalanced despite improvements in market sentiment.
NZIER said that despite market sentiment being supported, the impact of interest rate cuts has not been fully transmitted to actual activities since August last year.
European market
Swiss KOF economic barometer fell from 98.6 to 96.1 in June, lower than expected 99.3, marking another deterioration in growth momentum.
This decline reflects widespread weakness in most basic www.xmh100.components, with manufacturing being emphasized as “under considerable pressure”, according to KOF.
While the overall tone is negative, the improvement in foreign demand indicators is slightly offset.
U.S. Market
Chicago Fed Chairman Austan Goolsbee downplayed the risks of stagflation scenarios in the 1970s. He pointed out that as the unemployment rate is close to 4%, the inflation rate is around 2.5% and is constantly declining, the current environment has almost no similarity with the era of high inflation and high unemployment.
Goolsbee stressed in his overnight speech that today's economic fundamentals are much stronger, inflation is well below double digits, and the labor market remains tense.
However, he warned that the possibility of inflation and employment deterioration remained. “There is certainly a possibility that these two things will get worse at the same time,” he said. Goulsby constructs the prospect from the perspective of evaluating the amplitude and duration of bias between the two sides—whether the impact is temporary or structural.
Atlanta Fed Chairman Raphael Bostic pointed out in an interview with www.xmh100.comBC that "the situation is constantly changing" www.xmh100.complicating traditional prediction methods. His www.xmh100.comments www.xmh100.come as markets are watching the progress of President Trump’s new fiscal plan, which passed a key obstacle to the Senate over the weekend.
From an inflation perspective, Bostic said the Fed is watching how businesses and households adjust expectations and behavior based on the current situation. He saw "clear signs" that the www.xmh100.company plans to raise prices, but warned that the scope and timing of these price increases remain unclear.
Bostic also stressed that many businesses are now expecting to postpone tariff strategy decisions until 2026, suggesting that the impact of inflation “may be much longer than I think many people expect.”
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