Market Highlight 25.06.2025

  In his testimony before Congress last night, Federal Reserve Chair Jerome Powell reiterated the central bank’s concerns that elevated tariff levels could derail the years-long effort to rein in inflation. The market interpreted his remarks as a signal that the FED is likely to wait at least until its September meeting to assess whether the inflationary impact of tariffs proves milder than expected before resuming interest rate cuts. This cautious stance contrasts with calls from President Donald Trump and recent remarks by FED Governors Christopher Waller and Michelle Bowman, both of whom have expressed support for initiating rate cuts as early as July. Most FED policymakers continue to believe that U.S tariff policy will push prices higher over the summer. Following the June policy meeting, ten FED members projected at least two rate cuts in 2025, while seven expected no cuts, and the remaining two forecast a single reduction.
  The USD fell 0,4% on Tuesday, while the EUR surged to its highest level since October 2021, reaching 1,1609, after a ceasefire agreement between Iran and Israel was announced. Despite this easing in geopolitical tensions, Chair Powell reiterated that U.S inflation is expected to reaccelerate this summer - making it unlikely that the FED will cut rates in the near term. Data released Tuesday evening showed that U.S consumer confidence unexpectedly declined in June, as households grew increasingly concerned about business conditions and the labor market outlook over the next six months.
  In Vietnam, the USD/VND interbank exchange rate retraced on Tuesday in line with the weakening USD, closing the session at 26.160. The exchange rate is forecast to continue trending lower today, trading within the 26.100 - 26.200 range.

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