Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone
May 27, 2025:
The US Dollar rebounded from earlier losses on Monday, buoyed by the relief in global markets after President Donald Trump agreed to extend the deadline for the tariffs on European Union goods to July 9. The move came after a call with European Commission President Ursula von der Leyen, easing fears of an imminent trade confrontation. While fiscal concerns persist, this development provided a temporary boost to investor confidence, supporting the greenback.
However, challenges persist following the House’s approval of a multi-trillion-dollar tax bill projected to add nearly USD 4 trillion to the US debt. The legislation, now heading to the Senate, has reignited concerns about fiscal sustainability, particularly in light of Moody’s recent downgrade of the US credit rating.
Markets will focus on upcoming key economic data, including Durable Goods Orders, GDP growth, and the PCE inflation report. With expectations for rates to remain unchanged in both June and July meetings, any hint of dovishness could trigger renewed weakness in the dollar.