The dollar rebounds, gold rises to a halt, crude oil continues to coast

In the past week, Israel and Iran's missile attacks continued, but with Trump's announcement on Friday that he postponed the strike against Iran, and Fed Director Waller expressed support for a rate cut in July, U.S. stocks opened higher, and then fell due to the drag on chip stocks. The S&P 500 fell 0.22%, the Nasdaq fell 0.51%, and the Dow Jones closed up sharply with the support of Apple's rise of more than 2%.

U.S. Treasury yields plunged after Waller "released the dove", with short-term yields leading the decline. The interest-sensitive 2-year yield once hit 3.9%, and fell nearly 6 basis points this week, closing down for the second consecutive week, hitting an intra-week low after the Federal Reserve issued a new economic forecast on Wednesday. The dollar index hit its best weekly performance in four months, with its one-month risk reversal index climbing to positive for the first time in two and a half months, indicating that option traders expect the dollar to appreciate slightly in the next month.

In terms of xmserving.commodities, the rebound of the US dollar puts pressure on gold. Gold closed negative for the first weekly this month, but the US session continued to rise on Friday, almost smoothing out the intraday decline. The oil market has so far digested much of the impact of geopolitical turmoil, with sharp declines intraday news that Iran might restrict uranium enrichment, but it has risen for the third straight week and approaching its year-to-date highs.

In the next week, headlines surrounding the conflict between Iran and Israel will still dominate the market. In addition, a series of policy makers led by Federal Reserve Chairman Powell have emerged after interest rate resolutions, which may release more views on the path to cut interest rates. Under Trump's continued bombardment, the independence of the Federal Reserve has once again become the focus of attention. In terms of economic data, data including the US PCE and the euro zone PMI will reveal the impact of Trump's tariff war.

Forex Market:The US dollar index maintained a volatile upward trend this week, closing at 98.77 this week, up 0.63%. Although it fell at the beginning of the week before the Federal Reserve meeting, it was then rebounded due to retail data, risk aversion sentiment and fluctuations in US Treasury yields. In the early hours of Thursday, the Federal Reserve kept interest rates unchanged, but suggested that inflation would still face upward pressure from tariffs, supporting the dollar to remain stable at a high level, and geopolitical tensions also pushed up safe-haven demand for the dollar to a certain extent. In terms of non-US currencies, the euro, pound and yen all fell against the dollar this week as the overall increase. The euro and pound sterling remain at highs since early 2022.

Gold Market:Spot gold fell this week, and its overall performance was weak. On Monday, the US dollar fell more than 1% from its eight-week high. Although it was supported by risk aversion and turned into a volatile market, the strengthening of the US dollar put a significant suppression on gold prices. Gold prices fluctuated repeatedly on Tuesday and Wednesday, and accelerated on Thursday and Friday, closing at $3,368.52 per ounce, down 1.89%. Silver rose to a 13-year high at the beginning of the week, but began to accelerate on Wednesday, closing at $35.99 per ounce this week, down 0.85%. Both gold and silver closed down for the first time in three weeks.

Crude oil market: Oil prices fluctuate violently this week, driven by geopolitical news. Oil prices fell sharply on Monday due to signals of Iran's easing hostile relations; but on Tuesday, Trump urged to withdraw from Tehran, aggravated market concerns about the situation in the Middle East, causing oil prices to soar by more than 5%; Trump said on Wednesday that the United States and Iran were in contact, and oil prices were in decline; on Thursday, the market was worried about the risks in the Strait of Hormuz, and oil prices rose again and then fell back. Overall, oil prices are showing a "news-driven tug-of-war", and short-term risk sentiment dominates the trading rhythm.

Review of the news this week

1. The conflict between Iran and Israel escalates, and Trump has expressed his opinion that it may suspend military operations against Iran

Recently, the conflict between Iran and Israel has shown a xmserving.comprehensive escalation. The current situation shows that the Iraq-Iran conflict has escalated from initial limited retaliation to structural military confrontation. If the United States decides to intervene in military affairs, the conflict is very likely to evolve into regional wars and even trigger the reconstruction of the global geopolitical pattern.

In the past week, Israel has launched several attacks on Iranian nuclear facilities, targeting facilities in places such as Natanz, Isfahan and Arak. The International Atomic Energy Agency confirmed that some facilities were severely damaged and several Iranian centrifuge production bases were destroyed. In response, Iran launched more than 400 ballistic missiles on Israel and hit military targets and civilian facilities several times. Iran claimed to have shot down F-35 fighter jets, broke through Israel's air defense network, and claimed to have "full control over Israeli airspace."

Israeli Defense Minister Katz publicly stated that one of the goals of the military operation is to "eliminate Khamenei" and instructed the military to strengthen its attack on Tehran's strategic goals. Israeli Prime Minister Netanyahu said Israeli military has the ability to strike all nuclear facilities in Iran and said it has obtained the United States"Important support" of the country.

Iranian Supreme Leader Khamenei said that Iran will not surrender and will never accept any "imposed peace or war". Iran's deputy foreign minister warned that if the United States directly supports Israel, Tehran will "use all means to defend itself" and threaten the possible closing of the Strait of Hormuz. The Internet in Iran was once nearly paralyzed, further aggravating the outside world's concerns about the outbreak of a full-scale war.

Although the United States has not officially entered the war, its military actions indicate that it has been deeply involved in the conflict. The US military has continuously deployed troops on a large scale, and the US aircraft carrier strike group is heading to the Middle East, and the US base in the Middle East has entered the highest level of security.

The Trump administration's attitude is capricious. On the one hand, Trump denied seeking a ceasefire, made it clear that "Iran cannot possess nuclear weapons" and approved an attack on Iran in private, but no final order has been issued. He questioned whether the U.S. ground-boring bomb could destroy Iran's underground nuclear facilities and assessed the possibility of sending teams to raid. On the other hand, Trump said on Friday that the United States has been xmserving.communicating with Iran and may not be necessary to strike Iran, but it is difficult to get Israel to stop air strikes and is not inclined to urge Israel to stop so that negotiations with Iran can continue. He also said Iran has only weeks or months left to possess nuclear weapons and may support a ceasefire, praising Israel for performing well while Iran has underperformed.

Russia warned the U.S. could intervene in the conflict, saying it would “cause a terrible spiral of escalation” and said it would provide humanitarian aid to Iran if necessary. Putin stressed that Iran has not requested Russia to provide weapons.

One of the core focus of this round of conflict is Iran's nuclear program. Israel insists that it has intelligence that "Iran is close to making nuclear bombs", while Iran's top leaders repeatedly stressed that they "had no intention to develop nuclear weapons", but refused to negotiate a ceasefire with Israel during the war and once proposed to withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons.

The international xmserving.community is highly concerned about the direction of conflict and is worried that misjudgment will lead to the outbreak of a full-scale war. The EU, G7 and Middle Eastern countries have called for diplomacy as a priority to avoid the expansion of war. On Friday, Iran and the foreign ministers of Britain, France and Germany met for about three hours in Geneva, Switzerland, but failed to make Iran concessions. The Iranian foreign minister insists that Iran has the right to enrich uranium and says Iran will not re-enter nuclear negotiations with the United States until Israel stops its attacks. He stressed that nuclear facilities can be rebuilt even if they are destroyed, and technical knowledge cannot be destroyed.

2. The Federal Reserve keeps interest rates unchanged and expects to cut interest rates twice this year.

At the June interest rate meeting, the Federal Reserve unanimously decided to maintain the federal funds rate at 4.25% to 4.50%, which is the fourth consecutive time that it is still in line, in line with market expectations. On Friday, the Federal Reserve released its semi-annual monetary policy report, reiterating its position of "waiting and watching before cutting interest rates", emphasizing the impact of tariff uncertainty on consumer confidence and financial markets.

The latest interest rate dot chart shows that the median expectation of 2025 remains at 3.9%, implying that there may be two interest rate cuts this year; 2026 and 202The median expected interest rate in the seven-year period was raised to 3.6% and 3.4% respectively. It is worth noting that 7 of the 19 officials still believe that interest rate cuts are not appropriate this year, indicating that internal differences are obvious.

In terms of inflation, the Fed admitted that the current level is still "slightly higher" and raised its future core PCE expectations: 3.1% in 2025, 2.4% in 2026, and 2.1% in 2027. Economic growth expectations have become conservative, with median GDP growth expectations in 2025 and 2026 lowered to 1.4% and 1.6%.

Federal Chairman Powell said at a press conference that interest rates are currently in the "moderate or moderate tightening" range, which is not too high, but because the economic outlook is still highly uncertain, policies can be kept waiting and see. He stressed that interest rate cuts will only be considered after confirming that inflation continues to decline, and no official has high confidence in the path in the dot chart.

Powell also pointed out that tariffs may bring additional price pressure, but the US economy is still stable overall, the labor market has shown resilience, and employment is close to its maximum level. The uncertainty of the economic situation is still "extremely high", so the Fed has room to wait for more data before making policy adjustments.

In terms of policy xmserving.communication, Powell revealed that the Federal Reserve is evaluating whether to adjust its framework and xmserving.communication strategy, and is expected to xmserving.complete the review at the end of the summer, or reform tools such as dot maps. He stressed that in the future, we will pay more attention to flexibility and transparency to more effectively guide market expectations.

Powell did not respond to personal stay or leave in response to political factors that are concerned by the outside world, and refused to xmserving.comment on Trump's criticism. Before the resolution was released, Trump once again slammed Powell, saying that his delay in cutting interest rates was "extremely stupid" and said that he would do better if he served as chairman of the Federal Reserve. He xmserving.complained that the United States lost hundreds of billions of dollars in financing costs every year due to high interest rates, and xmserving.compared with Europe's multiple interest rate cuts, the United States "does nothing."

On Thursday, Trump once again publicly stated that the Fed should have cut interest rates by 250 basis points sharply at its June meeting, and called Powell a "not too smart politician." On Friday, Fed Director Waller made a clear release, praising his interest rate cuts in July, believing that tariffs will not lead to continued inflation. It is worth mentioning that he is one of the popular candidates for the next chairman of the Federal Reserve.

3. The Swiss National Bank cut interest rates to zero, and negative interest rate policies reappeared

In less than 24 hours, three European central banks - Switzerland, Sweden and Norway, collectively announced interest rate cuts, highlighting that global monetary policy is turning sharply to loosening. Among them, the Swiss National Bank cut interest rates to zero.

The Swiss National Bank announced on June 19, 2025 that it would lower the benchmark interest rate from 0.25% to 0%, becoming the first major central bank to return to zero interest rates after the epidemic. At the same time, the central bank imposes a punitive interest rate of -0.25% on banks' excess reserves. According to regulations, if the current deposits of banks in the central bank do not exceed 18 times the minimum reserve requirement, the interest rate can be deposited at -0.25%. This "hierarchical interest calculation" mechanism is designed to incentivizeInterbank lending ensures liquidity in the money market. The Swiss National Bank said the mechanism has been implemented since the key interest rates turned positive in 2022, and the average interbank lending rate is usually lower than the central bank's policy rate.

While negative interest rates reappear, Swiss National Bank Governor Schlegel hinted that the threshold for further interest rate cuts is high, and emphasized that xmserving.commercial banks' profitability does not belong to the central bank's policy objectives. Swiss banking and insurance sectors expressed concern about the decision, believing that the zero-interest rate environment will weaken savings enthusiasm and put pressure on the pension security system.

In addition, this week, the Bank of Japan maintained its target interest rate at 0.5%, and remained silent for the third consecutive time. The bank decided to maintain its existing bond reduction plan until March 2026, reducing the purchase of government bonds by about 200 billion yen per month from April 2026. The central bank emphasizes the predictability and flexibility of the plan, and will take flexible responses if long-term interest rates rise rapidly. At the same time, the Bank of Japan believes that the economy has recovered moderately and inflation expectations have risen moderately, but uncertainty in global trade policy still needs to be paid attention to.

The Bank of England kept the benchmark interest rate unchanged at 4.25%, in line with market expectations. Decisions are based on inflation above the target level and regional conflicts may impact the supply chain and cause inflation to rise. Despite weak economic growth and internal calls for interest rate cuts, the bank is still cautious in observing it.

4. Lujiazui Forum: The People's Bank of China announced eight new measures for financial opening up

The 2025 Lujiazui Forum was held in Shanghai. The People's Bank of China, the State Administration for Financial Regulation, the China Securities Regulatory xmserving.commission, the State Administration for Securities Regulatory xmserving.commission, the State Administration for Foreign Exchange and other departments issued a number of financial measures to help high-level opening up. The central bank will launch eight financial opening-up policy measures, including the establishment of an interbank market transaction reporting database, a digital RMB international operation center, and personal credit reporting agencies, carrying out offshore trade financial services pilot projects, developing free trade offshore bonds, optimizing the functions of free trade accounts, innovating structural monetary policy tools, and promoting RMB foreign exchange futures trading, aiming to promote financial innovation and high-level opening-up to the outside world.

In addition, the State Administration for Financial Regulation will support foreign institutions to participate in more financial business pilot projects. The China Securities Regulatory xmserving.commission will set up a science and technology innovation growth layer on the Science and Technology Innovation Board, and at the same time introduce 6 more inclusive and adaptable reform measures. The State Administration of Foreign Exchange will implement policies across the country to support scientific research institutions to attract and utilize foreign capital and expand cross-border financing convenience for technology-based enterprises.

5. The EU tends to accept 10% tariffs, and Japan refuses to set a negotiation deadline

EU Economic Affairs xmserving.commissioner Dongbrovskis said on Thursday that the EU is conducting intensive trade negotiations with the United States before the end of the "tariff period" on July 9 and has made progress. He stressed that the EU tends to find a solution that is acceptable to both sides to ease trade tensions. However, Dongbrovskis also warned that if an agreement is ultimately impossible, the EU will take steps to protect its own economic interests and businesses.

EU officials reportedly prefer to accept a 10% tariff rate as the baseline of the U.S.-EU trade agreement, although they are still striving to reduce the tax rate below 10%. American BusinessMinister Lutnik has ruled out the possibility of lowering the benchmark tax rate below 10%, which covers most of the EU's exports to the United States.

Japan's highest trade negotiator Ryomasa Akazawa said that Japan will not keep a close eye on the July 9 deadline, suggesting that negotiations may be delayed. The United States plans to restore the original tariffs to many countries on this date, and Japan's tariffs will rise from 10% to 24%. The U.S. Treasury Secretary has said it may extend the grace period for countries with "kind negotiations". At present, Japan and the United States have not reached an agreement and negotiations are still in progress.

6. How is the difference between the Senate version of the “Beautiful Great Act” and the House version?

Senate Finance xmserving.committee Chairman Crabbeau announced the Senate version of the “Beautiful Great Act” on Monday.

In terms of taxation, the draft plans to permanently increase the current personal income tax rate and increase the standard deduction to US$16,000 for individuals and US$32,000 for married joint filings. The child tax credit will be permanently increased from $2,200 to $2,200, down from $2,500 proposed by the House version and only extending into 2028.

In the green energy sector, both houses plan to cancel the main tax credits for wind and solar energy, but the Senate version has a longer transition period, allowing project departments to start construction by 2027 to share a credit, while the House version is terminated almost immediately.

In terms of Medicaid, the Senate draft plans to significantly reduce funds and gradually reduce the "provider tax" ceiling from 6% to 3.5% in 2031. At the same time, a monthly work requirement of 80 hours will be set for adults without disabilities, except for parents of children under the age of 14; the House version plans to xmserving.completely ban the addition of new "provider tax".

However, there are different opinions within the Senate. Four Republican senators questioned the House version of Medicaid cuts, and West Virginia's Jim Justice even demanded a resumption of the House version of content. Nevertheless, the Republican Party plans to push the bill forward in the next two weeks.

7. The U.S. Senate passed the Genius Act, and stablecoins ushered in a federal regulatory framework.

The U.S. Senate passed the Genius Act, the first federal regulatory bill for stablecoins, which is regarded as a major victory in the digital asset industry, especially against Circle, the largest stablecoin issuer in the United States.

The bill was passed by 68 votes in favor and 30 votes against it, and has now been submitted to the House of Representatives. It is expected that it will be passed in the House of Representatives, but it may take time. The bill requires stablecoin issuers to xmserving.comply with anti-money laundering regulations and sanctions, and for every dollar of stablecoin issued, they need to hold equivalent cash or short-term U.S. Treasury bonds as reserves. For large issuers with over $50 billion in circulation tokens, audited financial statements are also required. In addition, the bill prohibits government officials and lawmakers from issuing stablecoins to resolve potential conflicts of interest.

8. The central bank twice reverse repurchased within the month to strengthen liquidity regulation

On June 16, the People's Bank of China launchedA 6-month buyout reverse repurchase operation of 400 billion yuan was the second time the central bank has launched the tool this month. Previously, in early June, the central bank had carried out a 1 trillion yuan three-month buyout reverse repurchase operation, laying the foundation for abundant liquidity throughout the month. Since October 2024, the central bank has carried out such operations for nine consecutive months, but this mid-month operation and disclosed information in advance are intended to strengthen guidance and stabilize market expectations.

Experts pointed out that based on the release of 1 trillion yuan of long-term liquidity in May, the increase in volume in June will help cope with the peak of large-scale issuance of government bonds and interbank certificates of deposit maturity, maintain the abundant liquidity of the banking system, stabilize capital fluctuations, and show that the transparency of monetary policy has increased.

9. Investigation by the World Gold Council: The central bank's willingness to increase its holdings of gold hits a new high

The "2025 Central Bank Gold Reserve Survey" released by the World Gold Council shows that global central banks' strategic attention to gold continues to heat up. The survey received a total of 73 valid responses, setting a record high since its launch eight years ago, highlighting the central bank's high attention to gold reserves.

Survey results show that 95% of the central banks surveyed expect that global central banks will further increase their gold reserves in the next 12 months. Among them, a record 43% said that the central bank plans to increase its gold reserves during the period, and no central bank is expected to reduce its gold holdings.

It is worth noting that the proportion of central banks that actively manage gold reserves has increased from 37% in 2024 to 44% in 2025. Although increasing returns remains the main driving force, risk management has surpassed tactical trading and has become the second biggest consideration to promote gold allocation.

The Bank of England is still the most popular choice in terms of gold storage locations (64%), but the proportion of central banks that store gold in their own country has increased significantly, from 41% last year to 59% this year. Despite this, central banks that intend to continue to increase the proportion of domestic storage in the next year only account for 7%.

The above content is all about "[XM Group]: The US dollar rebounds, gold rises stutter, crude oil continues to roller coaster", which is carefully xmserving.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!

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