Key Points: The WSJ Dollar Index fell, marking its fourth-lowest reading of the year. Gold remained stable following a provisional trade agreement announcement. Oil prices surged due to a larger-than-expected drop in U.S. inventories and favorable macroeconomic signals. The dollar weakened after softer inflation data. The WSJ Dollar Index dropped by 0.2% to 95.28, its biggest daily decline since June 4. May’s inflation data came in weaker than expected, increasing expectations of a less aggressive stance from the Federal Reserve. According to Kyle Chapman of Ballinger Group, the Trump 2.0 administration has had a deflationary effect so far, with tariffs raising prices but weakening demand. If this trend continues, downward pressure on the dollar could increase in the coming weeks. The global currency radar showed a slight recovery for the euro and yen against the dollar after a provisional trade deal between Washington and Beijing. China’s decision to limit rare earth export licenses to U.S. manufacturers moderated demand for safe-haven assets like the yen but kept markets on edge. The pound sterling remained stable as traders assessed the next moves by the Fed and ECB. Gold ended the session nearly unchanged, with futures rising just 0.01% to $3,321.30 per ounce. The market cautiously processed an initial agreement between Trump and Xi, which still leaves room for tensions. Although gold typically rises in uncertain contexts, the muted reaction reflects that investors are awaiting more concrete details. The safe-haven radar remains alert for new signals from Washington and Beijing that could reignite demand for precious metals. Oil prices rallied strongly, driven by a larger-than-expected drop in U.S. inventories and stalled nuclear negotiations with Iran. WTI crude closed up 4.9% at $68.15 per barrel, while Brent gained 4.3% to $69.77. According to Mizuho, narrower export margins also limited U.S. crude exports. Overall, the global energy radar shows a supportive scenario for oil amid trade uncertainty and contained inflation.
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