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The Middle East de-escalation supported risk appetite, hurting dollar

The conflict in the Middle East has restored the US dollar's status as a safe-haven asset, but that has also been its downfall. The inverse correlation with US stock indices amid growing global risk appetite has caused the USD index to hit three-year lows. Investors perceive the ceasefire as the end of the Twelve-Day War between Israel and Iran and are buying stocks.

Carry traders are actively using the US dollar as a funding currency. Since the beginning of the year, its effectiveness in arbitrage against a basket of emerging market currencies has exceeded 8%. The use of the yen in carry trades has yielded just over 2%, while the euro and Swiss franc have been unprofitable.

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US Unemployment claims are on an upward trend, hitting a 3-year high

Weekly benefit claims indicate a deteriorating labour market. The number of repeat claims rose by 37K in the week ending 14 June (latest data) to 1.974 million, reaching its highest level since November 2021. The plateau in this indicator in mid-April was replaced by an upward trend, adding a total of 141K.

Excluding the volatility during the coronavirus pandemic, the last time such high values were seen was in 2017. Back then, that increase in unemployment did not turn into a recession, and the labour market soon returned to normal.

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Gold once again approaches a cliff edge

The Israel and Iran ceasefire has reduced demand for gold as a safe-haven asset. The precious metal failed to break out of the medium-term consolidation range of $3,100 to $3,400 per troy ounce and resume its upward trend. This signals weakness among bulls and allows Citigroup to predict a fall in prices below $3,000 in 2026. According to the bank, thanks to Donald Trump's ‘big and beautiful’ tax bill, the acceleration of the US economy will push gold prices down. The decrease in geopolitical risks will also contribute to gold's decline.

Goldman Sachs, on the other hand, maintains its forecast for the precious metal to rise to $4,000. It cites the insatiable appetite of central banks, the weakening dollar, and the fall in US Treasury bond yields. Indeed, the White House is keen on lower debt market rates and a weaker currency. A recent survey by the World Gold Council shows that 43% of central banks plan to increase their bullion purchases over the next 12 months, up from just 29% a year ago.

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What is next: European Inflation and US Jobs

As June turns to July, investors' attention will shift from geopolitics to trade wars. The expiration date of the White House's 90-day tariff delay is approaching. Countries are rushing to conclude trade agreements with the US to limit themselves to a universal tariff of 10%. The European Union is also rushing. However, Brussels is ready to impose retaliatory duties on imports worth $116 billion if negotiations with Washington are unsuccessful.

The escalation of trade wars could restore the direct correlation between the dollar and US stock indices. The greenback is used as a safe-haven currency when the epicentre of turmoil is outside the United States. When the threat comes from the White House, investors prefer to sell American assets such as the S&P 500 and the USD index.

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⚠️ USA — Core PCE Price Index at 03:00 GMT

✔️ Prev: 0.1% | 2.6%

🕒 Exp: 0.1% | 2.6%

🎯 Fact.: 0.2% 📈 | 2.7% 📈

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⚠️ Canada — Gross Domestic Product at 03:00 GMT

✔️ Prev: 0.2% | 1.7%

🕒 Exp: 0.0% | 1.3%

🎯 Fact.: -0.1% 📉 | 1.3%
🗓 Economic Calendar at 2025/06/30 (GMT)

01:00 🇳🇿 ANZ Business Confidence Actual: 46.3

01:30 🇨🇳 ⚡️ Manufacturing PMI — Exp: 49.6 Actual: 49.7

01:30 🇨🇳 Non-Manufacturing PMI — Exp: 50.3 Actual: 50.5

06:00 🇬🇧 Gross Domestic Product — Exp: 0.7% | 1.3% Actual: 0.7% | 1.3%

07:00 🇨🇭 KOF Economic Barometer — Exp: 99.3 Actual: 96.1

12:00 🇩🇪 Consumer Price Index — Exp: 0.2% Actual: 0.0% | 2.0%

12:00 🇩🇪 Consumer Price Index - EU Harmonised — Exp: 0.3% | 2.2% Actual: 0.1% | 2.0%

17:30 🇪🇺 ECB President Christine Lagarde Speaks

23:50 🇯🇵 Tankan Manufacturing Index — Exp: 10

23:50 🇯🇵 Tankan Non-Manufacturing Index — Exp: 34

23:50 🇯🇵 Tankan Large All Industry Capex

23:50 🇯🇵 Tankan Large Manufacturers Outlook

23:50 🇯🇵 Tankan Non-Manufacturing Outlook


[Updated in real time]
FxPro pinned «🗓 Economic Calendar at 2025/06/30 (GMT) 01:00 🇳🇿 ANZ Business Confidence Actual: 46.3 01:30 🇨🇳 ⚡️ Manufacturing PMI — Exp: 49.6 Actual: 49.7 01:30 🇨🇳 Non-Manufacturing PMI — Exp: 50.3 Actual: 50.5 06:00 🇬🇧 Gross Domestic Product — Exp: 0.7% | 1.3%…»
⚠️ China — Manufacturing PMI at 03:00 GMT

✔️ Prev: 49.5

🕒 Exp: 49.6

🎯 Fact.: 49.7 📈
🗓 Economic Calendar at 2025/07/01 (GMT)

01:45 🇨🇳 Markit Manufacturing PMI — Exp: 49.2 Actual: 50.4

07:50 🇫🇷 Manufacturing PMI — Exp: 47.8 Actual: 48.1

07:55 🇩🇪 Manufacturing PMI — Exp: 49.0 Actual: 49.0

07:55 🇩🇪 Unemployment Change — Exp: 18K Actual: 11K

07:55 🇩🇪 Unemployment Rate — Exp: 6.4% Actual: 6.3%

08:00 🇪🇺 Manufacturing PMI — Exp: 49.4 Actual: 49.5

08:30 🇬🇧 Manufacturing PMI — Exp: 47.7 Actual: 47.7

09:00 🇪🇺 Consumer Price Index — Exp: 2.0% Actual: 2.0%

09:00 🇪🇺 Consumer Price Index - Core — Exp: 2.3% Actual: 2.3%

13:30 🇺🇸 ⚡️ Federal Reserve Chairman Jerome Powell Speaks

13:30 🇪🇺 ⚡️ ECB President Christine Lagarde Speaks

13:30 🇬🇧 ⚡️ BOE Governor Andrew Bailey Speaks

13:30 🇯🇵 ⚡️ BOJ Governor Kazuo Ueda Speaks

13:45 🇺🇸 Manufacturing PMI — Exp: 52.0 Actual: 52.9

14:00 🇺🇸 ⚡️ JOLTs Job Openings — Exp: 7320K Actual: 7770K

14:00 🇺🇸 ⚡️ ISM Manufacturing PMI — Exp: 48.8 Actual: 49.0


[Updated in real time]
FxPro pinned «🗓 Economic Calendar at 2025/07/01 (GMT) 01:45 🇨🇳 Markit Manufacturing PMI — Exp: 49.2 Actual: 50.4 07:50 🇫🇷 Manufacturing PMI — Exp: 47.8 Actual: 48.1 07:55 🇩🇪 Manufacturing PMI — Exp: 49.0 Actual: 49.0 07:55 🇩🇪 Unemployment Change — Exp: 18K…»
Pro News Weekly Video: Why the Dollar Is Falling and Stocks At ATH

In this week’s episode of Pro News Weekly, we’re breaking down what’s really driving the markets right now — and why investors are reacting the way they are.

The US dollar is sliding to its lowest level in three years, even as stock indices like the S&P 500 and Nasdaq hit new record highs. What’s behind this unusual split? We'll examine the growing appetite for risk, renewed interest in tech stocks, and how geopolitical shifts are reshaping global sentiment.

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2025/07/02 02:22:52
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