Daily Market Update

Buck Battered to End Quarter

June 30, 2025

On the last day of this quarter, the United States Dollar is trading in mixed territory against most of its major peers.

 

Overview

The usual Dollar-bid action that markets see to close each month and quarter has failed to materialize in any substantial way today, and trade policy uncertainty continues to plague markets ahead of the Trump Administration’s July 9th deadline to re-impose the “reciprocal tariffs” of April 2nd after a 90 day pause. The Dollar is firmly set to wrap up the worst first half of any year since 1973, losing more than 10% of ground against the basket of currencies included in the Dollar Spot Index.

After tensions in the Middle East eased a bit – at least for now – through last week, trader focus has turned squarely back to policy issues, namely trade policy and the current congressional fight over the One Big Beautiful Bill. Last night Canada announced that it would do away with a digital services tax against the US in order to resume tariff negotiations, after President Trump called such a tax a “direct and blatant attack” and unilaterally halted all trade talks with our northern neighbors. As it stands now, just 9 days before the 90-day pause on reciprocal tariffs is set to expire, the only major trade deal the US has in place is with the UK, and all other G10 economies along with India are still in negotiations. The Eurozone in particular stands to face a 50% levy on all goods should a deal not be struck by next Wednesday’s deadline, though EU spokespeople have said that negotiations are taking place and they expect that some compromise could be found later next month. Domestically, focus is on the current battle in the Senate over the Administration’s massive tax and spending bill, which should it pass would add almost $3.3 trillion to the US deficit over the next decade. The bill’s passage is not guaranteed, and Republican leadership is scrambling to convert the party’s last few holdouts before a self-imposed July 4 deadline.

Even with a holiday-shortened week, the data calendar does bring the potential for further volatility with the release of non-farm payrolls for June on Thursday morning. Any downside surprise to the expected figure of 113,000 jobs added last month could bring with it a fresh wave of Dollar selling and add to bets on a July interest rate cut from the Federal Reserve.

 

What to Watch This Week…

  • Eurozone CPI, Tuesday
  • US Non-farm payrolls, Thursday 8:30AM
  • Monex USA Online is always open

The complete Economic Calendar can be found here.

 

EUR ⇑

The single currency, though trading flat against the Buck this morning, is attempting to post a 9-day winning streak versus USD, a streak it has only achieve three times since the currency’s inception in 1999. EUR has gained more than 14% of ground year-to-date versus the Dollar, vastly outperforming its gains against other G10 peers. Asset outflows from the US to Europe have no doubt contributed to such a disproportionate rise, as data from LSEG’s Lipper Funds showed that year-to-date more than $100 billion has flowed into Europe-based equities, and almost $87 billion has left the US market.

 

CAD ⇑

The Loonie is the best-performing currency in the G10 this morning, managing to eke out a gain of 0.2% against the Buck following Canada’s announcement that it would scrap a proposed digital services tax against the US just hours before it was set to go into effect Sunday night. After Trump decided Friday afternoon to end all trade negotiations with Canada as a result of this tax, CAD immediately fell by a third of a percent before market close, but is now trading close to flat with Friday’s opening levels. This about-face does appear to be a reversal from new Prime Minister Mark Carney’s initial hardline stance towards trade negotiations with the US.

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