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EU plans to take more tariff countermeasures against the United States
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: The EU plans to take more tariff countermeasures against the United States to put pressure on the United States." Hope it will be helpful to you! The original content is as follows:
On June 25, during the trading session of the Asian market on Wednesday, spot gold trading around $3,323/ounce, and gold prices fell on Tuesday, hitting the lowest level in more than two weeks. Previously, Iran and Israel announced a ceasefire, weakening the demand for gold safe-haven. At the same time, Federal Reserve Chairman Powell said at a congressional hearing on Tuesday that the Fed needs more time to observe whether the tariff hike will push up inflation before considering a rate cut; U.S. crude oil trading around $65.12/barrel, U.S. oil fell 3% on Tuesday, hitting a two-week low, as the market expected a ceasefire between Israel and Iran would reduce the risk of oil supply disruptions in the Middle East.
A ceasefire agreement began to take effect on Tuesday under pressure from U.S. President Trump, igniting hope for the two Middle East nemesis to end the largest military confrontation in history. "The market is currently lifting Middle East transactions," said Adam Button, chief currency analyst at ForexLive. "In testimony in the U.S. Congress, Powell said that he and many officials expect inflation to start rising soon and the Fed is not in a hurry to reduce borrowing costs during this period. But the dollar is still falling.
Two Fed policymakers have expressed support for the recent rate cut, citing concerns about the job market and weaker expectations for a rise in inflation. "The market originally expected Powell to crack down on the possibility of a rate cut, but he remained on the wait-and-see attitude." Button said: "The Fed is the most currentThe big argument is the job market. Waller and Bowman said they saw signs of weakness, while Powell said they did not see weakness in the labor market. ”
Federal Vice Chairman of Financial Regulation, Bowman, said on Monday that the timing of a rate cut seems imminent. Fed governor Waller said last Friday that the Fed should consider a rate cut at its next meeting. Trump said Tuesday that U.S. interest rates should be lowered at least two to three percentage points.
Federal funds futures traders are expected to cut interest rates by 60 basis points this year, with Waller’s expectations being about 46 basis points before his speech on Friday. This suggests that the market expects the Fed to cut interest rates twice again, 25 basis points each, and the possibility of a third rate cut is growing.
People still believe that the possibility of the Fed cutting interest rates at its July 29-30 meeting is small, with the first rate cut expected in September.
< p>The data released on Tuesday showed that US consumer confidence unexpectedly deteriorated in June as households were concerned about business conditions and employment prospects in the next six months.Asian market
Australia's monthly CPI decline in May exceeded expectations, from 2.4% year-on-year to 2.1%, the lowest level since October 2024, lower than the year-on-year forecast.
The basic inflation rate also fell, with the lowered average CPI falling from 2.8% to 2.4% year-on-year, strengthening signs that potential price pressures across the economy are easing. Excluding volatility xmmarkets.cnmodities and holiday travel, inflation fell slightly to 2.7% year-on-year.
p>
The biggest annual price increase was food and non-alcoholic beverages (+2.9%), housing (+2.0%), and alcohol and tobacco (+5.9%).
Overall data strengthened the reason for the RBA to cut further interest rates in the second half of the year, especially as deflation widened.
Bank of Japan Board member Naoki Tamura said today that even in the face of ongoing uncertainty, the central bank must be ready to adjust its policy rates “timely and appropriately” based on changing data. While real interest rates remain low, Tamura stressed that interest rate hikes would be guided by evidence of continued improvement in economic activity and inflation, and stressed the need to be “no rush or impatience”, or procrastinate.” Tamura added that uncertainty is the norm in policy making, but this should not paralyze decision-making. If inflation risks go up meaningfully or the probability of reaching the 2% target increases, the Bank of Japan should be ready to act “decisively.” Summary of opinions at the Bank of Japan’s June 16-17 meeting highlights the growing division among policymakers about the risks posed by U.S. tariffs. While hard data in recent April and May were “relatively reliable,” some officials warned that the real impact of tariffs “has not yet revealed.” One member stressed the need to carefully evaluate the impact because it “certainly” suppresses business sentiment, while another member said the economy was “a bit stagnant.”p>
Nevertheless, the board of directors is not unanimously pessimistic. Some members insisted that the damage caused by the tariffs would be limited, pointing to strong wage growth and steady consumer inflation. One member even stressed the impact of rice prices on “perceived inflation and inflation expectations” and urged close monitoring. Others pointed out that the domestic background is still relatively strong, wages are rising and inflation is slightly higher than expected.
The Bank of Japan has kept its policy interest rate unchanged at 0.5%, and decided to gradually reduce its bond holdings starting next year.
European Market
European Central Bank chief economist Philip Lane said in a speech today that the deflation process in the euro zone is "basically xmmarkets.cnpleted". But monetary policy makers are now facing "a series of new challenges." Trade tensions, geopolitical instability and a strategic shift in fiscal policy are now frontiers and centers that shape medium-term inflation risks.
Lane points to a wide variety of disruptive factors—from re-engineering tariff regimes to stricter foreign investment rules, and the growing overlap between economic and security policies. The impact of structural forces such as green transformation, artificial intelligence and evolving xmmarkets.cnparative advantages is also unclear. He stressed that these issues affect inflation from both demand and supply and may unfold on different timetables.
Faced with so many changes, Lane called for continued reliance on data and adopt flexible interest rate decision-making methods, "not making advance xmmarkets.cnmitments to any specific future interest rate path." In this environment, the central bank's main task is to "ensure that any temporary deviation from the target does not turn into long-term deviations."
Bank of England Deputy Governor Dave Ramsden defended his vote on interest rate cuts last week, pointing to signs of weak labor markets and worsening outlooks. Ramsden cited PAYE data to point out that private sector employment is now “significantly in a contraction zone”, indicating an increasingly weak economy.
Ramsden acknowledged that the decision to vote for the tax cut was "subtle and balanced", but stressed that even at 4%, the policy was still "apparently in restrictive territory." As demand cools down and employment indicators weakens, he believes it is important for the Bank of England to continue to adjust.
U.S. Market
Kansas City Fed Chairman Jeff Schmid spoke overnight, saying that the Fed's "wait and see" position is appropriate, especially given that inflation is still above the target and the impact of rising tariffs is still permeating the economy. “The elasticity of the economy gives us time to see how prices and how the economy develops,” he added.
Schmid noted that business contacts “almost consistently” expect tariffs to push up prices and drag down economic activity, thus diverging the Fed’s inflation and employment directives. But “there is much less clear about when and how much to adjust,” Schmid said, who thinks there is little reason to go ahead before the economy becomes clearer, before the economy becomes more clear, there is little reason to go ahead in the near termInterest rate adjustment.
Federal Director Michael Barr warned that the recent wave of tariffs could push up inflation, noting that there could be “higher short-term inflation expectations, supply chain adjustments and second round effects.” Barr acknowledged in his speech overnight that this could exacerbate inflation, even with a broader economic slowdown, with the current 4.2% unemployment rate rising slightly.
Bar said that despite these disadvantages, the Fed can "wait and see" how the economic situation evolves before adjusting its policy. He pointed out that there is considerable uncertainty in tariff policies and their impacts, emphasizing that monetary policy needs to strike a "trade-of-weight" balance between supporting growth and curbing inflation.
New York Fed Chairman John Williams warned overnight that the xmmarkets.cnbination of policy uncertainty, restrictive trade measures and a decline in immigration will seriously drag down the U.S. economy this year. He expects the unemployment rate to drop to 4.5% by the end of 2025 and the growth rate to 1%. Williams also expects inflation to soar to 3% in the near term driven by tariffs, although he expects inflation to slowly fall back to 2% over the next two years.
While Williams describes hard economic data as still solid, he acknowledges the growing disconnect from weak indicators, which suggests growing concerns among consumers and businesses. Nevertheless, he has shown signs that inflation expectations remain anchored despite the recent price shock.
Looking forward, Williams stressed that monetary policy will be guided by data that expires in the “next months” that will determine whether and when the Fed should adjust interest rates. Although he reiterated that “interest rates need to eventually return to more normal levels,” his xmmarkets.cnments suggest that wait-and-see attitude remains the most likely route at the moment.
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