Insights 
VT 
The US dollar experienced declines against major currency pairs, dropping 0.92% against the JPY and CHF, 0.7% versus the GBP, and 0.50% against both the AUD and NZD. In contrast, USDCAD remained near constant due to a sharp 5% decrease in crude oil prices, which fell by over $10 in two days of trading.
Fed Chair Powell’s testimony was a focal point, where he emphasised the resilience of the US economy and labour market. He mentioned the possibility of a rate cut as soon as July, contingent on economic data, while noting that inflation might rise due to new tariffs. Powell highlighted that the Fed is prepared to pause interest rate changes for now.
Stock Market Response
In the stock market, Powell’s comments, combined with news of a ceasefire between Israel and Iran, bolstered gains. Major indices rose over 1.1%, with Nasdaq leading at a 1.43% increase. Meanwhile, US debt yields fell, with the 10-year yield decreasing by 3 basis points to 4.292%.
Other markets showed crude oil trading down 5.41% to $65.01, gold dropping by 1.31% to $3323.06, and Bitcoin rising by 0.39% to $105,870.
What we’ve just seen was a broad but uneven retreat of the US dollar, with its strength fizzling out most noticeably against the yen and Swiss franc—down by nearly a full percentage point in both cases. Sterling advanced as well, though not quite as sharply, and the commodity-linked currencies of Australia and New Zealand also gained ground. The loonie, however, barely budged, held in place as oil prices collapsed quite dramatically, which can often undercut Canadian dollar momentum.
This disconnect between the broader decline in the dollar and the loonie holding firm might appear puzzling, but if crude tumbles by more than $10 in a matter of days—as it just did—it tends to level out any currency impact. That 5% drop in oil left some ripple effects beyond just commodities, also surfacing in inflation expectations and risk sentiment.
Market Volatility and Economic Data
Powell’s session on the Hill contributed plenty of market motion. While he reinforced the firm underpinnings of employment and general economic health, his remark that rates could come down as early as next month was absorbed quickly by traders. Crucially, he inserted a condition: the data must cooperate. The tension here is obvious—on the one hand, a strong job market; on the other, the reappearance of inflationary risks due to potential tariffs. Yet, he also suggested no rush, with the current rate path on hold unless data suggest otherwise.
That murky territory gave equity markets something they often seem to crave—a delay rather than acceleration. Combined with headlines of a ceasefire overseas, this calmed some geopolitical nerves. It wasn’t just equity bulls who reacted; the bond market softened as well, as seen in the gentle slip of Treasury yields. A 3bp move down to 4.292% speaks to growing conviction that the rate peak has already been reached.
Nonetheless, those trading rate-sensitive instruments must remain agile. It’s not so much about broad direction at the moment but rather how the path gets shaped week to week—one upside inflation surprise, one weaker-than-expected non-farm print, and things shift. For those engaged in short-term plays, that means paying close attention to upcoming CPI figures and employment reports, and being prepared for intraday movement when Fed speakers come back into focus.
Gold’s decline was more than just cosmetic. A drop of over 1.3% tells us how expectations of looser policy aren’t yet cemented and perhaps reflect some dollar short-covering late in the session. Meanwhile, Bitcoin’s modest pop suggests appetite remains for alternative risk proxies, though volumes were likely thin given the broader market caution.
For now, positions should reflect sensitivity not just to scheduled economic events, but also to what might come undone in commodities—particularly oil—and their secondary effects. Volatility isn’t spiking, but rests just under enough pressure to jolt implieds on any fresh movement.
