The U.S. Dollar is closing out a week characterized by tariff promises against a variety of nations with its overall value recovered only slightly by less than three tenths of a percent.
Overview
Markets in general this week have not been moving wildly as investors and traders adjust to the constant potential for higher costs to trade as the White House puts pressures on all countries, dangling a deadline of August 1st for countries to work on deals that will avoid the levying. What is clearer than before as we passed the half-way mark for 2025 is that these tariffs and proposals will remain a part of a strategy to put everything and anything up for renegotiation and the achievement of concessions. This tool will now be the replacement for sanctions or financial blocks.
We also noticed how Federal Reserve members are not sharing a consensus on monetary policy and while some see the need to become more stimulus-driven sooner, there are others making argument for waiting patiently for inflation data as well as the effects on growth, which are yet to convince officials they need to all jump on slashing interest rates. There is little that is consistent at the moment, so the long-term vision is blurry. The 10-year treasury yields are now up to 4.38% while in seeking alternatives to stocks, investors are jumping to Bitcoin, which climbed to a new record of $118K. We shall se if over the weekend the proposals of surges to tariffs on non-USMCA products for Canada go away or remains a headline. Everything is up in the air.
What to Watch This Week…
- Monex USA Online is always open
The complete Economic Calendar can be found here.
GBP ⇓
Pound Sterling has dropped by over half a percent in value this week following disturbance to trade and mixed data figures showing the economy has some issues in productivity. Gross Domestic Product numbers from Marh through May climbed by 0.5%, but there was a (-0.1%) contraction in May, so the economy is slowing down a bit. The big disappointment came in the form of Industrial as well as Manufacturing Production which came in much worse than anticipated. While May industrial was expected to fall slightly by (-0.1%), it collapsed by (-0.9%), close to the actual Manufacturing figure of (-1.0%) vs. (-0.1%) forecast.
MXN ⇓
The Mexican Peso is down overall for the week, moving within a half-percent range throughout the week but ultimately losing ground to the Buck. Despite some good economic indicators, the currency is currently dropping as markets get jittery over possible tough negotiations with North American partners over the USMCA and recent push for unilateral costs. Meanwhile, the Mexican economy is trying to push through and overcome the headwinds with May Industrial Production and Manufacturing climbing into positive territory jumping by over half a percent instead of registering the contractions predicted.
