Insights 
VT 
The US dollar ended mostly higher against major currencies, despite earlier declines. The dollar was lower against the Japanese yen, experiencing a 0.45% drop, but saw gains against the euro and British pound with increases of 0.15% and 0.38% respectively. The Australian dollar rose by 0.63%, and the New Zealand dollar by 0.69%. The USD tried to move lower during the European session but reversed in the US session. In stock markets, tech stocks led gains with AMD up 4.68% since May 6 and NVIDIA up 34% since April 22. Super Micro Computers’ shares rose 15.69% after a new partnership.
Federal Reserve officials commented on the economy and policy. Governor Jefferson signalled current rates are suitable for evolving conditions, yet the future remains uncertain due to potential new tariffs. Fed’s Goolsbee highlighted patience amid volatile short-term inflation trends, reinforcing the Fed’s cautious approach. The US debt market showed increased yields with the 2-year yield at 4.057%, while gold declined by 2.10% to $3181.30, dropping 7.8% from its recent peak. In equities, Dow fell 89.37 points, S&P rose 6.03 points, and NASDAQ climbed 136.72 points. Crude oil dropped 76 cents, trading at $62.91, while Bitcoin decreased by $646 to $103,494.
Us Dollar’s Selective Weakness And Recovery
What we have observed is a reassertion of the US dollar’s strength, even in the face of initial softness. Its loss against the yen reflects selective weakness, potentially tied to modest shifts in rate expectations or cautious demand for safe-haven currencies. But the recovery versus the euro and sterling tells a different story—one where the dollar remains supported and has not lost hold of broad confidence.
Its mid-session dip in Europe likely came from transient sentiment during policy comments or data releases, but this was swiftly corrected as trading moved to New York. The reversal suggests that few are willing to commit aggressively against the dollar when questions remain about the global inflation path and upcoming supply-side challenges. Overall, the dollar is acting as a stabilising force, particularly in an environment where clarity is patchy.
In the equities space, tech continues to do the heavy lifting. The surge in chip-related shares, especially from Super Micro, indicates continued belief in future revenue growth and strategic alignment with AI and data demand. However, rising share prices have not necessarily translated into broader equity performance. The Dow’s loss versus modest gains in the NASDAQ reinforces the idea that movement is concentrated rather than market-wide.
Federal Reserve Cautious Approach
From the policy side, Jefferson’s remarks showed a leaning towards holding the current rates steady, given unclear future inflation inputs. His use of “conditions” and the reference to potential new tariffs point squarely at risks to pricing, particularly on the supply end. We interpret this as an acknowledgment that while past rate hikes have filtered through, headline inflation might be stirred again if external shocks mount.
Goolsbee was direct in supporting a measured stance. His emphasis on patience amid choppy short-term pricing data suggests officials are alert to avoid being coerced into action before the numbers give repeated confirmation. This measured tone sees reinforcement from the yield curve, especially in shorter maturities. The 2-year yield creeping above 4% shows the market is still building in the possibility of fewer cuts—or even a long pause.
Outside of fixed income, metals took a hit. Gold’s retreat—not just from the day, but from its high—is not just about profit-taking. It aligns with firmer yields and diminished concern about monetary easing. Further downside from elevated levels could be likely if inflation data cools in a sustainable pattern.
Crude oil’s weakness, although mild, suggests that demand expectations are not improving markedly. There’s little evidence of extended positioning on the long side. If anything, storage and production balances may be dictating price, rather than broad macro flows.
Bitcoin’s decline—the largest among the leading assets—is worth watching, not because of any specific headline, but due to what it reflects in sentiment. A fall over $600 in a day, alongside stronger dollar performance, confirms that excessive risk appetite is being pared back.
Underneath this all, we are focused on directional indications in rates and FX, especially on shorter horizons. There is plenty to manage. Market reactions to Fed speakers imply traders are increasingly sensitive to rhetorical shifts—a sign the next large data print or policy comment could spark sharp movement in riskier assets.
