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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: The US dollar index fell due to the cooling of inflation and the Fed's interest rate cut expectations rising." Hope it will be helpful to you! The original content is as follows:
XM Forex APP News-- During the European session on Thursday (June 12), the US dollar index (DXY) continued to fall on the second day, hovering around 98. The previously released inflation data was lower than expected, further strengthening market speculation that the Fed may start a rate cut in September. The CPI was lower than expected, which stimulated the Federal Reserve's dovish expectations that the Consumer Price Index (CPI) in May rose 2.4% year-on-year, lower than 2.5% expectations; the core CPI fell to 2.8%, lower than expected 2.9%. These data reinforce market expectations that the Fed will cut interest rates by 25 basis points, and the CME Fed observation tool shows that the probability of a rate cut in September is rising. Weak inflation and broader growth slowdowns put pressure on the dollar. Trump's remarks on China have increased uncertainty US President Trump claims that the U.S.-China trade agreement is close to finalization, and a 55% tariff on Chinese goods will be imposed in the agreement, which further triggers market volatility. Since it has not been officially confirmed by China, the market remains cautious. Despite escalating tensions between the United States and Iraq and the United States issued a withdrawal warning, the US dollar has not gained favor from safe-haven funds as Fed dovish expectations continue to dominate market sentiment. Analysts from Dutch International Group (ING) believe that the US dollar index is currently very close to the April low of 97.90/98.00, which can be seen as the bottom of the trading range. The dollar price is underperforming, and we may be seeing the lagging impact of global portfolio reconfiguration decisions, such as direct sale of U.S. assets or increasing hedging ratios.
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