URGENT UPDATE: The USD is holding steady against major currencies as the new trading week kicks off, just ahead of a highly anticipated 25 basis point rate cut expected from the Federal Reserve on July 10, 2025.
Current trading indicates limited movement in key currency pairs, with the EURUSD, USDJPY, and GBPUSD all reflecting minor fluctuations. Market analysts are closely monitoring these developments as traders prepare for the Fed’s decision on interest rates, which could signal a shift toward a more neutral monetary policy.
This week’s rate cut follows a significant reduction of 100 basis points in 2024 and an additional 50 to 75 basis points projected for 2025 as the Fed navigates persistent inflation levels that remain above the 2% target. The markets are bracing for what many believe will be a hawkish cut, indicating the Fed’s cautious approach amid mixed economic signals.
Recent employment data adds complexity to the outlook. While ADP reports show job market weakness, initial jobless claims indicate stability, suggesting a “no hire/no fire” environment. This mixed picture raises questions about the sustainability of economic growth as inflation continues to be a pressing concern for policymakers.
In the stock market, US indices are trading slightly higher following last week’s gains. The current standings are as follows:
- Dow Industrial Average: up 10.01 points
- S&P Index: up 9.85 points
- NASDAQ Index: up 77.20 points
In the US debt market, yields are trending upward, reflecting investor sentiment ahead of the Fed meeting:
- 2-Year Yield: 3.579%, up 1.5 basis points
- 5-Year Yield: 3.730%, up 1.6 basis points
- 10-Year Yield: 4.150%, up 1.2 basis points
- 30-Year Yield: 4.801%, up 1.0 basis points
As markets react to these developments, traders and investors are urged to stay informed about the Fed’s upcoming announcements. Expect further movement in the USD and the major currency pairs as the situation evolves.
This article was written by Greg Michalowski at investinglive.com.
