The US Dollar is trading stronger across G10 currencies but remains down overall for the week as traders close short positions ahead of month and quarter-end. Fed Chair Jerome Powell signaled the possibility of an interest rate cut at the upcoming FOMC meeting, contingent on Friday’s PCE inflation data. Powell also expressed concerns about potential inflationary effects from tariff policies, with the 90-day tariff pause set to expire on July 9th. The data calendar is light, but key releases, including the final Q1 GDP and PCE inflation readings, may drive further volatility. Meanwhile, the Australian Dollar is holding strong, benefiting from positive risk sentiment despite weak CPI data, while the Japanese Yen is underperforming due to volatile trading and risk-on market conditions. Internationally, the NATO summit concluded with leaders agreeing to increase defense spending, and Japan denied US requests to raise its own defense budget.
