{"id":25109,"date":"2025-06-25T01:59:06","date_gmt":"2025-06-25T01:59:06","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=25109"},"modified":"2025-06-25T01:59:06","modified_gmt":"2025-06-25T01:59:06","slug":"dollar-sinks-as-ceasefire-spurs-risk-rally","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/dollar-sinks-as-ceasefire-spurs-risk-rally\/","title":{"rendered":"Dollar Sinks as Ceasefire Spurs Risk Rally"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/usd5-1024x559.png\" alt=\"\" class=\"wp-image-16972\" \/><\/figure>\n\n\n\n<p><strong>Key Points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Dollar Index (USDX) eased to 97.91 as risk appetite returned.<\/li>\n\n\n\n<li>EUR\/USD climbed to $1.1621, its highest since October 2021.<\/li>\n\n\n\n<li>US 2-year yield dropped to 3.7870%, a 1.5-month low.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The dollar continued its slide on Wednesday, unable to regain ground after markets embraced risk on news of a <a href=\"https:\/\/t.co\/P5X7ZrWi9h\" target=\"_blank\" rel=\"noopener\" title=\"\">shaky ceasefire between Iran and Israel<\/a>. U.S. President Donald Trump brokered the truce earlier this week, bringing a 12-day air conflict to a tentative halt.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Selling the dollar to invest in emerging-market currencies looks increasingly appealing, as greenback volatility drops relative to other traditional funders <a href=\"https:\/\/t.co\/JvWfJ2vbNA\">https:\/\/t.co\/JvWfJ2vbNA<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1937687780018012300?ref_src=twsrc%5Etfw\">June 25, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Despite the conflict reprieve, macroeconomic signals in the US continue to paint a mixed picture. Fed Chair Jerome Powell, during his semi-annual testimony to Congress, reiterated the central bank&#8217;s cautious stance and showed no urgency to cut rates.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Jerome Powell told Congress the Fed won&#39;t cut rates until it gets a better handle on inflation, adding that he and many at the Fed expect inflation to start rising soon, and that the central bank was in no rush to ease borrowing costs in the meantime <a href=\"https:\/\/t.co\/DfkffWQfy9\">https:\/\/t.co\/DfkffWQfy9<\/a> <a href=\"https:\/\/t.co\/ix1WFyyVeW\">pic.twitter.com\/ix1WFyyVeW<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1937665795263238334?ref_src=twsrc%5Etfw\">June 25, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>However, markets aren\u2019t waiting. The <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\" target=\"_blank\" rel=\"noopener\" title=\"\">CME FedWatch Tool<\/a> now places an 18% chance of a rate cut as soon as July, and nearly 60 basis points of easing are priced in by December. A key driver of this shift is weakening consumer confidence\u2014June data showed an unexpected drop as households voiced growing concerns over job availability.<\/p>\n\n\n\n<p>This dovetails with softening yields. The two-year Treasury yield fell to a 1.5-month low of 3.7870%, reflecting lower near-term policy expectations. The benchmark 10-year yield hovered at 4.3043%.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The dollar extended its retreat, closing at <strong>97.43<\/strong>, down from the <strong>98.99<\/strong> high seen just a day earlier. The chart shows a clear, sustained downtrend with the price unable to reclaim even the 97.70 zone. MACD remains weak, while the moving averages slope downward with little sign of reversal.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/image-28.jpg\" alt=\"\" class=\"wp-image-25110\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: Bearish momentum dominates as dollar hovers near 97.30 lows, as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>The session low at <strong>97.28<\/strong> now serves as short-term support, but pressure remains heavy.<\/p>\n\n\n\n<p>Should economic data continue to underperform and inflation pressures ease despite tariffs, the Fed may shift toward rate cuts in Q3. This scenario would add further downside pressure on the dollar, particularly against the euro and risk-sensitive currencies.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Create your live VT Markets account<\/a> and <a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*1azgbap*_gcl_au*NjE5NTE3MjY4LjE3NDQ2MDA3NDI.*_ga*MTY4OTgwNTU5Mi4xNzM2NzQ2MTgy*_ga_J26NL1ZVX7*czE3NDQ5NDQ0NTYkbzEyMCRnMCR0MTc0NDk0NDQ1NiRqNjAkbDAkaDA.\" target=\"_blank\" rel=\"noopener\" title=\"\">start trading<\/a> now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US dollar weakened further as traders turned to risk assets amid Israel-Iran ceasefire optimism. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":16972,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,11],"class_list":["post-25109","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-dollar","tag-indices"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/25109","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=25109"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/25109\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16972"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=25109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=25109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=25109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}