FOREX NEWS & BLOG

UK BRC Shop Price Index for June 2025

• UK shop price inflation rose in June for the first time in nearly a year
• driven by a sharp 3.7% annual jump in food prices, the fastest pace since March 2024
• British Retail Consortium attributed the rise to higher wholesale costs and increased labour expenses, especially for fresh produce like meat.
• Analysts warn that if consumer spending weakens, rising prices could become a concern heading into the latter part of the year.

This article was written by Eamonn Sheridan at www.forexlive.com.

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New Zealand building permits for May 2025

+10.4% m/m

• prior revised to -14.6%
• for the y/y comes in at -0.8%

This article was written by Eamonn Sheridan at www.forexlive.com.

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Australian final June 2025 manufacturing PMI 50.6, down from the flash reading and down from May.

Prelim is here:

• Australia preliminary June 2025 manufacturing PMI 51.0 (prior 51.0)

Commentary from the report:

• “Australia’s Manufacturing PMI data showed that
  growth of the goods-producing sector moderated for
  a third consecutive month in June. While flash data
  initially pointed to renewed output growth, the final
  reading indicated a slight downturn in production,
  reflecting some weakness into the end of the month.
  This was amidst a renewed fall in new orders, while the
  Future Output Index showed reduced optimism among
  manufacturers, and pointing to weaker growth in the
  months ahead. Additionally, the New Export Orders
  Index was also reflective of subdued trade conditions
  in June, with a marked fall in new work from abroad
  recorded.
• “Notably, margin pressures were observed in June,
  though the continued fall in selling price inflation is a
  welcome development to support sales growth whilst
  also boding well for the lowering of interest rates into the
  second half of 2025.”

This article was written by Eamonn Sheridan at www.forexlive.com.

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Japan plans to start extracting rare earth elements from the seabed near Minami-Torishima Island in fiscal 2025, beginning January 2026, according to Nikkei Asia (gated).

In brief:

The project, aimed at reducing dependence on China for critical minerals used in electric vehicles and electronics, was originally set for 2024 but was delayed due to a late pipe delivery.

• Location: Pacific Ocean, approximately 1,900 km southeast of Tokyo, near Minami-Torishima Island

• Resources: Mud rich in rare earths, including cobalt and nickel

• Timeline: Extraction to begin in early 2026

• Strategic Goal: Diversify Japan’s supply chain for rare earths, currently dominated by China

This article was written by Eamonn Sheridan at www.forexlive.com.

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• Record closes for the major indices.
• ECB’s Lagarde The world is more uncertain and that should lead to inflation more volatile
• Crude oil settles at $65.11
• NEC Hassett: He expects trade frameworks will come after July 4
• Trump to send letter to Japan: Buy rice now
• Fed’s Goolsbee (2025 voter) does not see any prospect of 1970s stagflation
• ECB’s Simkus: Does not know if the ECB will have all the information they need by Sept
• Trump to Jerome “Too Late” Powell…You should be ashamed. Rates should be paying 1%
• Goldman Sachs moves its next Fed rate cut from December to September
• European indices close mixed. German France and UK indices close lower
• More Bostic: Wage gains have returned to pre-pandemic levels
• NEC Director Hassett: Expects the one big beautiful bill to pass by midnight tonight
• Feds Bostic: Advance warning on tabs have allowed firms to manage process
• Treasury Secretary Bessent:Confident that fiscal policy bill will progress in coming hours
• ECB’s Rehn: Risk of inflation undershooting target should not be underestimated
• Nikkei: Japan PM Ishiba weighs US Pres suggestion that Japan buys US oil
• The USD is little changed to start the holiday week. US jobs on Thursday ahead of July 4
• ForexLive European FX news wrap: Dollar tepid, US futures up ahead of month-end
• Germany June preliminary CPI +2.0% vs +2.2% y/y expected
• What are the interest rates expectations for the major central banks?

The USD Index (DXY) closed out June with a steep decline, hitting a new low for the year at 96.77, a level not seen since March 1, 2022. The index fell -2.67% in June, marking a clear shift in sentiment toward the U.S. dollar. All major currencies gained against the greenback this month, with the euro (EUR) and Swiss franc (CHF) posting the largest advances.

The EURUSD rose 3.86%, the biggest monthly gain among the majors. This move came despite the ECB delivering another rate cut, bringing its policy rate to 2.00%. Markets seem to believe the ECB is now prepared to pause after ten consecutive cuts, while the Fed remains stuck at 4.50%, delaying its own easing cycle. Traders increasingly expect the Fed to move earlier than previously anticipated, adding pressure on the dollar.

The USDCHF also posted strong losses, driven by flight-to-safety flows into the Swiss franc amid rising geopolitical tensions. Concerns that the U.S. could be drawn into the ongoing Iran–Israel conflict added to the CHF’s appeal.

Additional weakness in the dollar was fueled by growing political pressure. Donald Trump, in a surprising twist, sent a handwritten note to Fed Chair Powell accusing him of costing the country “millions” by delaying rate cuts, asserting that interest rates should already be at 1%. Trump has also hinted at replacing Powell, potentially as soon as January, raising questions about future monetary policy direction.

The market is now watching closely to see if the Fed bends under the pressure or stays the course. Either way, June’s sell-off in the dollar reflects everything from concerns about US deficits, to the expectation for sharply lower rates ahead, political interference, and mounting global risks.

The snapshot of the changes for the month showed:

• EUR -3,86%
• JPY -0.04%
• GBP -2.1%
• CHF -3.51%
• CAD -0.93%
• AUD -2.32%
• NZD -2.33%

In the US debt market in June yields have moved lower. A look at the yield changes along the interest rate curve:

• 2 year yield -17.7 basis points at 3.72%.
• 5 year yield, -17.5 basis points at 3.799%.
• 10 year yield, -16.6 basis points at 4.232%
• 30 year yield -14.7 basis points at 4.77%

In the US stock market for June, the major indices closed at record levels (for the second day in a row) to end the trading month. Gains were led by the NASDAQ index :

• The Nasdaq index closed the month with a solid gain of 6.57% after rising by 9.56% in May.
• The S&P index rose line 4.96% after rising by 6.1% in May.
• The Dow Industrial Average rose by 4.32% after a gain of 3.94% in May

This article was written by Greg Michalowski at www.forexlive.com.

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There are plenty of breathless headlines crossing about a 10.8% decline in the US dollar in “1H”.

Just for clarity that is NOT one hour as some folks seem to think. Sheesh, look at a chart!

Yes, the USD is awfully weak. Trump is debasing the dollar further with his threats against Fed independence, adding to the losses.

I posted yesterday, first thing,

• USD a little softer (the story of the hapless US dollar for 2025 so far! Not a trend you want to be fighting.).

And on Trump’s weekend dollar-debasement comments cutting the legs further from the dollar:

• USD set to get another thrashing after Trump’s weekend debasement comments

• “ … I don’t want to have to pay for 10 years debt at a higher rate.”
• “ … we’re to get somebody into the Fed who’s going to be able to lower the rate.”

This article was written by Eamonn Sheridan at www.forexlive.com.

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Morgan Stanley forecasts Brent crude will drop to around $60 per barrel by early 2026, citing easing geopolitical tensions — particularly between Israel and Iran — and a well-supplied market.

• The bank projects strong non-OPEC supply growth of about 1 million barrels per day in both 2025 and 2026, which it says will be enough to keep pace with global demand increases.
• Morgan Stanley also reiterated its view of a 1.3 million barrels per day oversupply in 2026.

This article was written by Eamonn Sheridan at www.forexlive.com.

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