Markets opened Monday cautiously optimistic, despite holidays in the US and UK, after President Trump delayed the planned 50% tariffs on the EU to July 9. Optimism grew over a potential US-Iran nuclear deal following five rounds of talks. Sentiment was further supported by fresh stimulus hopes from China and easing concerns over Trump’s tax bills, which now face internal Republican resistance, potentially limiting US debt fears.
In this backdrop, the US Dollar Index (DXY) fell to a five-week low, extending last week's steepest drop since early April. EURUSD and GBPUSD extended gains while USDJPY seesaws near a three-week low, and AUDUSD and NZDUSD hit multi-day highs. Further, USDCAD dropped to its lowest since October 2024, despite a lackluster oil performance.
Gold trades near a two-week high after a strong weekly rally, while crypto markets edge higher, testing key resistance levels. Asia-Pacific equities posted modest gains despite a weak Wall Street close, partly tied to lingering EU tariff concerns.
Despite growing expectations of a June rate cut and cautious remarks from ECB officials over trade tensions, EURUSD surged to a one-month high after President Trump postponed the planned 50% EU tariffs from June 1 to July 9. The delay, following EU-US talks, boosted sentiment and kept the Euro firm amid mixed market signals.
Meanwhile, USDJPY found temporary support near a three-week low as risk appetite slightly improved. A pause in the pair’s decline may be linked to stalled US-Japan trade negotiations, though Japan’s PM Kishida still targets a deal by mid-June. Even so, the Yen remains favored by its haven appeal and the Bank of Japan’s hawkish tone, especially with the US Dollar broadly weaker.
GBPUSD surged to its highest level since February 2022, confirming a bullish “Cup and Handle” breakout that’s been forming for 10 months. The rally is driven by upbeat UK retail sales and inflation data, optimism over new trade deals, and broad US Dollar weakness. Despite Monday's market holiday in both the UK and the US, hawkish expectations around the Bank of England (BoE) helped keep Pound bulls firmly in control.
A broad US Dollar decline and optimism around China lift AUDUSD and NZDUSD to six-month highs, while USDCAD slides to its lowest level since October 2024. However, AUD/USD gains face headwinds after China criticized Australia’s move to reclaim Darwin Port from a Chinese operator.
For USDCAD, upbeat Canadian retail sales and improved global trade sentiment support the Loonie, but mixed signals from the Bank of Canada (BoC) and soft crude oil prices limit further downside.
Meanwhile, NZDUSD holds gains even as traders brace for a potential RBNZ rate cut this week.
Crude Oil prices stay under pressure as rising concerns over a US-Iran deal, potential output increases from the Middle East, and OPEC+ readiness to ramp up supply weigh on sentiment. Adding to the bearish tone are rising US inventories and doubts over Trump’s “Drill baby Drill” strategy. Still, trade optimism and a softer US Dollar help limit losses.
Meanwhile, Gold remains firm near key resistance, supported by strong demand from China and India, market uncertainty, and its safe-haven appeal, even as broader sentiment stays mixed.
After a brief dip on Friday, Bitcoin (BTCUSD) and Ethereum (ETHUSD) bounce back, eyeing key technical resistance levels. Renewed optimism in the crypto space—fueled by ETF inflows and positive sentiment following Trump’s election—keeps bulls in control as investors seek safer alternatives in mixed markets.
With UK and US holidays and a light calendar, Monday may stay subdued, potentially offering the US Dollar room to recover. However, the rest of the week promises action with the OPEC+ meeting, FOMC Minutes, and inflation data from the US, Japan, and Australia. Traders will also keep a close eye on US trade talks, Trump’s tax bill risks, and geopolitical tensions involving Iran and Ukraine. While debt and trade worries may weigh on the Greenback, a hawkish Fed stance could offer support and challenge the buyers of major currencies, especially the EURUSD and GBPUSD.
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