Kickstart the new trading day, week, & month w/ technical look at EURUSD, USDJPY & GBPUSD | Forexlive
The U.S. dollar is lower today primarily due to renewed concerns over President Donald Trump’s aggressive tariff policies and their potential to hinder economic growth and increase inflation. The dollar has been under pressure from fears of capital outflows, as investors react to trade tensions, particularly with China, and uncertainties around a potential U.S. “revenge tax” on foreign investors.Meanwhile, reports that China is holding back on certain goods to the US manufacturers to interupt supply flows has been surfacing as well.
The dollar is lower vs the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD. I take a look at each of those currencies in the video above from a technical perspective and explain the key levels in play now and going forward.
Stocka are lower as are bond prices (yields are higher).which are also contributing the the bearish bi
Federal Reserve Governor Christopher Waller stated that the inflation surge seen during the pandemic is no longer a concern, and he does not believe tariffs will create a persistent inflation problem. He emphasized the importance of focusing on real economic activity when inflation is near target and expressed skepticism that a 10% tariff could raise inflation to 3%. Markets, he noted, determine long-term yields, which are currently rising partly due to expectations of stronger fiscal conditions. He also touched on technological advancements in AI and stablecoins, viewing the latter as payment instruments rather than game-changers. Separately, Waller noted that while “good news” on inflation could allow for rate cuts later this year, that outlook depends heavily on how tariffs and inflation trends evolve. He expects tariffs to create only a one-time price shock, though they could become the primary inflation driver in 2025. The inflationary effects are expected to peak in the second half of the year, possibly leading to weaker labor market conditions. Waller remains cautious about the uncertain trade environment and the potential for temporary inflation, especially if tariff legislation fails to pass.
The S&P Global Final manufacturing PMI for May will be released at 9:45 AM ET. The preliminary came in at 52.3 higher than the last month reading of 50.2.
At 10 AM, US construction spending is expected to rise by 0.3% versus -0.5% in March.
The ISM manufacturing PMI for May will also be released at 10 AM with expectations of 49.5 versus 48.7 last month.
Looking at the US stocks is implied by the futures:
- Dow industrial average -135 points
- S&P index -25 points
- NASDAQ index -110 points. The NASDAQ index rose by over 9% in May.
In the US debt market:
- 2 year yield 3.920%, +0.6 basis points
- five year yield 3.987%, +1.0 basis points
- 10 year yield 4.436%, +1.8 basis points
- 30 year yield 4.970%, +4.0 basis points
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