Dollar Pressured by Dovish Fed Comments
The dollar index (DXY00) on Monday fell by -0.33%. The dollar on Monday dropped from a 3-week high and turned lower on dovish Fed comments. Fed Governor Bowman and Chicago Fed President Goolsbee said they favored a Fed rate cut at next month's FOMC meeting. Also, Monday's rebound in stocks curbed liquidity demand for the dollar. In addition, Monday's fall in the 10-year T-note yield to a 6-week low weighed on the dollar's interest rate differentials.
The dollar initially rallied to a 3-week high Monday after the weekend attack by the US on Iran's nuclear facilities boosted safe-haven demand for the dollar. The dollar also found support from the stronger-than-expected US PMI and existing home sales reports.
Palantir, Nuclear Stocks, and the Put/Call Ratio: Key Stocks, Sectors, and Indicators on Watch After U.S. Strikes on Iran
Dollar Pressured by Dovish Fed Comments
Dollar Firms on Escalation of Middle East Tensions
Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now!
The June S&P US manufacturing PMI was unchanged at 52.0, stronger than expectations of a decline to 51.0.
US May existing home sales unexpectedly rose +0.8% m/m to 4.03 million versus expectations of a -1/3% m/m decline to 3.95 million.
Fed Governor Bowman said, 'Should inflation pressures remain constrained, I would support lowering the fed funds policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market.'
Chicago Fed President Goolsbee said the Fed could resume interest rate cuts if the inflation hit from tariffs remains subdued.
The markets are discounting the chances at 23% for a -25 bp rate cut after the July 29-30 FOMC meeting.
EUR/USD (^EURUSD) Monday rose by +0.42%. The euro recovered from early losses on Monday and rallied after the dollar gave up an early advance and sank on dovish Fed comments. The euro on Monday initially moved lower due to weaker-than-expected Eurozone June PMI reports. Also, dovish comments on Monday from ECB Governing Council member Centeno undercut the euro when he said the Eurozone economy needs more ECB stimulus.
The June S&P Eurozone manufacturing PMI was unchanged at 49.4, weaker than expectations of an increase to 49.7. Also, the June S&P Eurozone composite PMI was unchanged at 50.2, weaker than expectations of an increase to 50.4.
ECB Governing Council member Centeno said, 'The supply and demand conditions are still too weak in the Eurozone to allow a return to the 2% inflation target without further stimulus.'
Swaps are discounting the chances at 6% for a -25 bp rate cut by the ECB at the July 24 policy meeting.
USD/JPY (^USDJPY) Monday rose by +0.07%. The yen tumbled to a 1-1/4-month low against the dollar today on concern that rising energy costs will derail Japan's economy after the escalation of Middle East hostilities pushed crude prices up to a 5-1/4 month high. The yen also fell after Japanese officials denied a Financial Times report that said the US asked Japan to raise its defense spending to 3.5% of annual GDP.
However, the yen recovered most of its losses on Monday after T-note yields plunged following dovish comments from the Fed. The yen also garnered support from Monday's Japanese economic news, which showed that the June Jibun Bank Japanese manufacturing PMI expanded at its fastest pace in 13 months. In addition, the Japan Finance Ministry's cut in its long-term bond sales was supportive for the yen.
The June Jibun Bank Japan manufacturing PMI rose +1.0 to 50.4, the highest level in 13 months.
The Japanese Finance Ministry said it will reduce the volume of 20-year, 30-year, and 40-year bonds sold in auctions by a combined 3.2 trillion yen ($21.7 billion) starting in July through the end of March 2026.
August gold (GCQ25) Monday closed up +9.30 (+0.27%), and July silver (SIN25) closed up +0.170 (+0.47%). Precious metals moved higher Monday after the US launched attacks over the weekend on Iran's nuclear facilities, escalating tensions in the Middle East and prompting some safe-haven demand for precious metals. Lower global bond yields on Monday were also supportive of precious metals. In addition, dovish central bank comments boosted demand for precious metals as a store of value. Fed Governor Bowman and Chicago Fed President Goolsbee said they support a Fed rate cut at next month's policy meeting, and ECB Governing Council member Centeno said the Eurozone economy needs more ECB stimulus. Fund buying of gold and silver continues to support prices. Gold holdings in ETFs rose to a 1-3/4 year high last Friday, and silver holdings in ETFs rose to a 2-3/4 year high.
Monday's rally in stocks limited the upside in precious metals. Also, Iran's meager retaliation attempt against the US for attacking its nuclear facilities reduced safe-haven demand for precious metals after missile attacks by Iran on US bases in Qatar were intercepted with no damage done to US assets.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bloomberg
22 minutes ago
- Bloomberg
Wind, Solar Credits Face Shorter Phase-Out in GOP's New Tax Bill
Key tax incentives for US wind and solar projects would face a more aggressive phase-out in the Senate's latest version of President Donald Trump's spending package. The tweak, which follows pushback by Trump on the Inflation Reduction Act credits, would sharply limit the number of solar and wind farms that qualify for incentives, appeasing opponents while risking the ire of moderate members who argued for a slower phase-out.
Yahoo
24 minutes ago
- Yahoo
Can PayPal Stock Hit $125 in 2025?
Digital payment giant PayPal's (PYPL) story has been anything but smooth. After soaring in 2020 and carrying the momentum into early 2021, PYPL stock stumbled, ending three consecutive years in the red. While 2024 brought a much-needed rebound, 2025 has seen shares slip once again. Much of PayPal's decline can be traced to rising competition. Newer, faster fintech rivals have outpaced the company with sleeker, more intuitive payment solutions. Still, PayPal isn't going down without a fight. In response, PayPal brought in CEO Alex Chriss in 2023 to reset its strategy. Under his leadership, the company has launched features like one-click and express checkout while sharpening its focus on profitable growth and operational efficiency. Dear Nvidia Stock Fans, Watch This Event Today Closely A $2 Billion Reason to Sell Super Micro Computer Stock Now 3 ETFs Offering Juicy Dividend Yields of 15% or Higher Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! PayPal's ever-expanding partner network — featuring giants such as Amazon (AMZN), Shopify (SHOP), Apple (AAPL), Alphabet (GOOGL), and Meta Platforms (META) — also remains a powerful asset. With Wall Street's highest target pegged at $125 for the stock, can PayPal rally hard enough to hit that mark before the year wraps? PayPal runs a global technology platform that connects merchants and consumers through a dynamic two-sided network. Whether shopping online or in-person, users can pay, get paid, transfer, or withdraw funds using a wide range of options, including bank accounts and cards, PayPal and Venmo balances, cryptocurrency, and more — making digital payments seamless and accessible worldwide. With its market capitalization currently hovering around $71 billion, PayPal remains a major player in the fintech space. However, its stock performance tells a different story. Delivering a 25% return over the past one year, the stock has taken a 14% hit so far in 2025, underperforming the broader S&P 500 Index ($SPX) by a wide margin, with the benchmark up 4.4% year-to-date (YTD). PYPL stock touched a YTD high of $93.25 in January but has since fallen more than 21% from that peak. Considering its sluggish price action, PayPal now appears to be a potential value play. The stock is trading at just 14 times forward earnings and 2.25 times sales, which is significantly below its five-year averages. For investors hunting for discounted fintech names, PayPal's current valuation could offer an attractive entry point. PayPal delivered its fiscal 2025 first-quarter earnings on April 29. The results were a mixed bag, showing a slight revenue miss but a strong profit beat. Sales rose just 1% year-over-year (YOY) to $7.8 billion, falling short of expectations. However, the company made it clear this was by design. PayPal emphasized its strategic pivot toward profitability, deliberately phasing out lower-margin revenue streams. That shift paid off on the bottom line. Adjusted EPS came in at $1.33, up 23% from a year ago and beating Wall Street estimates by an impressive 15.7% margin. PayPal continued to strengthen its financial footing in Q1, with transaction margin dollars — the company's core profitability metric — rising 7% to $3.7 billion. Active accounts grew 2% YOY to reach 436 million, reflecting steady user engagement. Backed by a strong balance sheet with $15.8 billion in cash, cash equivalents, and investments, PayPal also returned $1.5 billion to shareholders through share repurchases, underscoring its commitment to capital returns. Reflecting on the Q1 performance, Chriss noted, 'PayPal had a great start to the year and our strategy is working. This is our fifth consecutive quarter of profitable growth with progress across branded checkout, PSP, omnichannel, and Venmo.' Looking ahead, PayPal offered a dose of optimism with strong Q2 guidance, projecting adjusted EPS between $1.29 and $1.31, signaling continued momentum on the profitability front. For the full year, the company took a more cautious stance. Citing ongoing global macroeconomic uncertainty, PayPal reaffirmed its earlier guidance, expecting full-year EPS to land between $4.95 and $5.10. By comparison, analysts tracking PayPal project the company's profit to grow 9.3% annually to $5.08 per share in fiscal 2025, followed by an even stronger 11% rise to $5.64 in fiscal 2026. Overall, Wall Street sentiment toward PYPL stock remains cautiously upbeat, with analysts giving it a consensus 'Moderate Buy' rating. Of the 44 analysts offering recommendations, 16 give it a solid 'Strong Buy" rating, two suggest a 'Moderate Buy,' 22 give a 'Hold,' and the remaining four advocate for a 'Strong Sell" rating. PYPL stock's average analyst price target of $79.81 indicates 9% potential upside. But the Street-high target of $125 tells a more bullish story, implying a potential rally of 70% if the company's turnaround strategy hits its stride. On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
24 minutes ago
- Yahoo
Can Nvidia Stock Hit $250 in 2025?
Artificial intelligence (AI) darling Nvidia (NVDA) is once again making waves, this time by reclaiming its title as the world's most valuable company. The chipmaker, which has been at the heart of the AI boom and a go-to name for Big Tech's most advanced computing needs, saw NVDA stock hit a fresh record high on June 25. The surge came after Loop Capital analyst Ananda Baruah described Nvidia as poised to ride a 'Golden Wave' of AI. NVDA stock closed up by more than 4% in a single day, pushing its market capitalization just ahead of Microsoft (MSFT). Apart from bullish analyst commentary, what really caught investors' attention was Loop's aggressive price target hike from $175 to $250. With enthusiasm running high, can Nvidia continue to soar and actually hit that lofty target in 2025? Dear Nvidia Stock Fans, Watch This Event Today Closely A $2 Billion Reason to Sell Super Micro Computer Stock Now 3 ETFs Offering Juicy Dividend Yields of 15% or Higher Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Nvidia needs no introduction. It's the name behind the AI boom and the muscle behind everything from gaming and data centers to self-driving cars. With its cutting-edge chips powering the next wave of tech innovation, the company has firmly cemented its place at the center of the digital revolution. While it has faced some turbulence in 2025 — ranging from U.S.-China trade tensions to concerns over slowing AI spend and rising competition — Nvidia still remains a key player in the AI race. Although Loop Capital's Street-high price target has certainly fueled excitement, there's a broader wave of optimism driving the rally. Investors appear increasingly confident that China's export restrictions won't derail Nvidia's leadership in the AI space, especially as global demand for advanced computing continues to soar. Adding to the bullish tone, CEO Jensen Huang struck an ambitious note at Nvidia's annual shareholder meeting on Wednesday, describing AI and robotics as a 'multitrillion-dollar growth opportunity.' The comments come at a time when governments around the world are ramping up investments in sovereign AI capabilities to tackle critical national priorities. With momentum building across both private and public sectors, Nvidia's long-term growth story remains as compelling as ever. Now commanding a staggering $3.76 trillion market cap, Nvidia has stormed back into the spotlight, fueled by bullish analyst calls, a bold growth outlook from leadership, and global demand for AI solutions. Nvidia surged to a new 52-week high of $156.72 on June 26. With a 15% gain in 2025 so far, the stock is easily outpacing the broader S&P 500 Index's ($SPX) 4.4% return year-to-date (YTD). The chipmaker's fiscal 2026 first-quarter earnings, posted on May 28, didn't disappoint, crushing expectations on both revenue and profit. Nvidia reported a massive 69% year-over-year (YOY) increase in revenue, reaching $44.1 billion and surpassing the $43.3 billion estimate. As usual, it was the data center segment that stole the show, continuing to drive Nvidia's role at the heart of the AI revolution. Nvidia's data center business demonstrated a stunning 73% YOY jump to $39.1 billion, making up a commanding 88% of total revenue. The gaming segment also impressed, climbing 42% to $3.8 billion on strong demand for high-performance chips. Even the automotive and robotics unit got in on the action, racing ahead by 72% YOY to $567 million. Nvidia ran into a regulatory hurdle in the quarter when the U.S. slapped fresh restrictions on its previously approved H20 chip for China. The fallout wasn't small. The company took a $4.5 billion hit for excess inventory and missed out on an estimated $2.5 billion in sales. That dragged its adjusted gross margin down to 61%, although without the impact that would have come in at a much stronger 71.3%. On the bottom line, Nvidia delivered adjusted earnings of $0.81 per share, up 33% from last year and beating expectations by 8%. Without the H20 chip charge, earnings would have jumped to $0.96 per share. Still, investors seemed pleased, sending NVDA stock up 3.3% on May 29. Looking ahead, Nvidia is guiding for $45 billion in revenue for Q2 of fiscal 2026, give or take 2%. That figure already bakes in an estimated $8 billion hit from the latest export restrictions on its H20 chips. On the profitability side, Nvidia expects GAAP and non-GAAP gross margins to be 71.8% and 72%, with a 50-basis-point cushion in either direction. Despite recent headwinds, the company isn't backing down. It's still setting its sights on gross margins climbing into the mid-70% range by year-end. Fueling Nvidia's latest surge, Loop Capital cranked up its price target from $175 to a Street-high $250, reaffirming its 'Buy' rating. Analyst Ananda Baruah didn't hold back in his bullish outlook, remarking that we're entering the next 'Golden Wave' of generative AI adoption, with Nvidia positioned right at the forefront. According to Baruah, demand for Nvidia's high-end AI chips is ramping up even faster than expected, setting the stage for another powerful leg of growth. Overall, Nvidia continues to enjoy unwavering support on Wall Street, where the consensus remains a resounding 'Strong Buy.' Of the 44 analysts offering recommendations, 37 give NVDA stock a 'Strong Buy" rating, three suggest a 'Moderate Buy,' three offer a 'Hold,' and one analyst advocates for a 'Strong Sell" rating. The average analyst price target of $174.84 indicates 13% potential upside from current price levels. However, Loop Capital's street-high price target of $250 suggests the stock can rally as much as 61%. With solid fundamentals, soaring AI demand, and strong backing from Wall Street, Nvidia's climb to $250 in 2025 may be bold, but it is looking increasingly achievable. On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
