The dollar index hovers below 97, Trump is about to send a letter to specify tariff rates

On July 7, early trading in the Asian market on Monday, Beijing time, the US dollar index hovered around 96.95. Last Friday, the US dollar index fell back and fluctuated back and forth near the 97 mark, and finally closed down 0.07% to 96.93. Spot gold fluctuated upward, and once returned to $3,340 during the session, but failed to stabilize above this mark and finally closed up 0.35%, closing at $3,337.22/oz; spot silver finally closed up 0.25%, at $36.93/oz. The two oils fell as the market expected OPEC+ to increase production again. WTI crude oil fell sharply during the European session and once reached an intraday low of $65.24, and finally closed down 1.07% to $65.62 per barrel; Brent crude oil closed down 0.62% to $68.14 per barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovers around 96.95. The trend of the US dollar index is driven by multiple fundamental factors. First, Trump's tariff remarks continue to ferment, and market concerns about the global trade prospects are intensifying. This week the Federal Reserve will release minutes of its last FOMC meeting, and the market is highly concerned about whether it sends out signals that it may cut interest rates in the future. Analysts pointed out that if the minutes are biased, it means that policymakers are cautious about the economic outlook, and the dollar may face pressure to pull back; on the contrary, if the need to maintain high interest rates is emphasized, it is expected to boost the dollar's strength. Although the United States has limited macro data next week, the non-farm employment data in June was strong and the unemployment rate fell, providing some support for the US dollar. Technically, the US dollar index has recently triedGet rid of annual lows but face resistance around 50MA. If the U.S. dollar index climbs above 50MA at 97.15, it will move towards the next resistance level 98.00–98.20.

Euro: As of press time, the euro/dollar hovers around 1.1780. European Central Bank President Lagarde stressed that he would vigorously deal with the phenomenon of continuing to deviate from inflation targets, with a slightly hawkish tone, providing short-term support for the euro. Analysts believe that if the Sentix index improves, it may provide an opportunity for the euro to repair it, otherwise it will continue to have a weak trend. After Monday, the EU schedule will release announcements on German industrial production data, Euro Group meeting, a spokesperson for the ECB and retail sales data for May. Technically, successful testing of resistance level 1.1785–1.1800 will open the way for testing the next resistance level 1.1895–1.1910.

GBP: As of press time, GBP/USD is hovering around 1.3648. Recently, the pound has been continuously pressured by fiscal concerns. Cautious risk sentiment, stronger-than-expected U.S. non-farm employment data and political uncertainty in the UK have led to the pound being defensive, and the GBP/USD pairs are facing difficulties in continuing their recent rally. Technically, if GBP/USD successfully closes 1.3684 above 50MA, it will move towards resistance levels 1.3730–1.3750.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On the Asian session on Monday, gold trading around 3324.28. For investors, the current sideways consolidation of gold may be a good opportunity to make a layout. In the short term, gold prices may fluctuate in the range of $3,250 to $3,456, but once new catalysts appear in geopolitical or macroeconomics, gold prices are expected to break through the highs and challenge $3,500 or even higher. In the long run, the U.S. debt crisis, the weakening of the dollar and potential inflationary pressure will continue to support the attractiveness of gold as a safe-haven and value-preserving asset. Investors should closely monitor the progress of this week’s trade negotiations, minutes of the Federal Reserve meeting and interest rate decisions for the Australian and New Zealand Fed to seize investment opportunities in the gold market.

Technical: From a technical perspective, the price of gold is currently in a high consolidation state. August gold futures price is around $3340, approaching the midpoint of April high $3539.30 and May low $3151domain. In the short term, gold prices fluctuate between $3,250 and $3,476.30, showing the characteristics of sideways consolidation. Gold bulls need new fundamental stimulus to break through the current trading range. The bullish sentiment of retail investors (59% expected gold price to rise) has injected some confidence into the market, but gold prices may continue to fluctuate at high levels in the short term, waiting for new catalysts.

2) Analysis of crude oil market trends

On the Asian session on Monday, crude oil trading around 66.37. OPEC+ eight core member states agreed to increase oil production by 548,000 barrels per day in August, exceeding the market expectations of 411,000 barrels. Oil prices fell slightly last Friday, with U.S. holiday trading calm, markets focused on the weekend's OPEC+ meeting and the possibility of member states' decision to increase production. Meanwhile, as the 90-day tariff moratorium is about to end, uncertainty in U.S. tariff policy has once again become the focus of people's attention.

Technical: WTI crude oil futures fell, but remained stable above the key support level of $65.55, which makes the possibility of a bullish trend resumed in the upcoming period. The recent decline is to obtain the required bullish momentum to support its potential rise, and there is also the continued support of EMA50, which strengthens the strength of this level as an important support point. Therefore, we expect to show that in the upcoming day trading, the price will rise, especially if it stabilizes above the $65.55 support, targeting the $68.00 resistance level. The estimated trading range is between the support level of $64.50 and the resistance level of $68.00.

Forex market trading reminder on July 7, 2025

①To be determined China's June foreign exchange reserves

②14:00 Germany's May seasonally adjusted industrial output monthly rate

③14:00 UK June Halifax seasonally adjusted housing price index monthly rate

④16:30 Eurozone July Sentix Investor Confidence Index

⑤17:00 Eurozone May retail sales monthly rate

⑥22:00 US June global supply chain pressure index

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