20/06/2025 Daily Reports
USD – Dollar: Stabilising Amid Geopolitical Ambiguity
• The White House is expected to decide on a potential Iran strike within 10 days, leaving markets in a cautious holding pattern.
• Brent oil prices remain below $80/bbl as Iran accelerates exports amid fears of future sanctions.
• The USD has struggled to regain momentum; traders resumed short positions amid fading geopolitical escalation risks.
• Today’s focus: US PMI flash and Michigan Consumer Sentiment – both expected to show modest softness.
• Without a strong catalyst, DXY is likely to stay range-bound, lacking upside momentum in the near term.
Euro: Holding Above 1.150, But Upside Limited
• EUR/USD is stabilising above 1.150, with reduced geopolitical premium priced into the pair.
• The euro is moving more on external sentiment than domestic fundamentals due to a light macro calendar.
• Further upside toward 1.160 is unlikely unless geopolitical tensions ease substantially.
• Range-bound trading between 1.148 and 1.156 is expected in the short term.
GBP – Pound: Dovish Tilt Following BoE Vote Split
• BoE held rates unchanged, but the narrow 5–4 vote split suggests a dovish leaning within the committee.
• Markets now increasingly price in a rate cut for August, especially if inflation data surprises to the downside.
• Sterling has been resilient, but lack of forward guidance from the BoE adds to near-term uncertainty.
• EUR/GBP remains slightly bullish in our multi-week outlook.
What’s Next?
• While the dollar’s recent stabilisation reflects market hesitation rather than renewed confidence, the underlying tone remains fragile. Traders appear reluctant to aggressively chase the greenback higher without clear escalation in the Middle East or significantly stronger US data.
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SoftBank Looks for $1 Trillion US AI Complex; Europe Announces €70B Tech Fund; Africa Encourages Payments in Local Currency As Dollar Dominance War Escalates
• SoftBank Group Corp founder Masayoshi Son is reportedly looking for a humongous $1 trillion industrial complex in Arizona to house robots and artificial intelligence, in the hopes of collaborating with Taiwan Semiconductor Manufacturing Co (TSMC) and the Trump administration. The ambitious “Project Crystal Land” aims to revive high-tech manufacturing in the US.
• The EIB, meanwhile, will unveil a €70 billion (approximately $75 billion USD) program, “Tech EU,” in the following three years to fund European tech businesses to mobilize a further €250 billion of private capital. The program will position Europe to compete with China and the US in clean and digital technology with €20 billion allocated for equity, €40 billion for lending, and €10 billion for guarantees.
• Concurrently, African nations are moving solidly towards the establishment of local currency payment systems to reduce reliance on the US dollar for trade, a trend becoming ever more imperative in reaction to realignments in global commercial flows and geopolitics, albeit resisted strongly by the Trump administration. This mirrors efforts by other countries like China and Russia to develop financial systems independent of Western institution dominance.
• On the other hand, Japan’s top trade negotiator, Ryosei Akazawa, indicated trade negotiations with the US “were still in a fog,” and the looming July 9 deadline for “reciprocal tariffs” remained uncertain. Despite that, a Fidelity International money manager says the worst of Trump’s tariff threats are behind us, and Japanese midcap stocks, German midcaps, and Chinese midcaps are good to invest.
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