The release of the inflation data (consumer price index/CPI) from the United States triggered significant movements in the financial markets this past Tuesday. The CPI for June was reported to have increased by 2.7% year-on-year (YoY), surpassing the Trading Central forecast of 2.6% YoY and also up from the previous month’s figure of 2.4% YoY.
Meanwhile, the core CPI grew by 2.9% YoY, matching the Trading Central forecast but higher than the previous month’s 2.8% YoY.
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This rise in inflation can be partly attributed to the import tariff policies enacted by President Donald Trump. The increase has confirmed concerns from The Fed, leading them to tread carefully regarding interest rate cuts.
The CPI data will continue to influence market movements during trading on Wednesday (July 16, 2025).
GOLD
Gold (XAUUSD) prices dropped by $18.51 (185.1 pips) to $3,324.47 per troy ounce during trading on Tuesday, after reaching a high of $3,366.34 per troy ounce earlier. The precious metal reversed direction following the release of the US inflation data, which prompted The Fed to adopt a cautious stance on lowering interest rates.
High interest rates held for a longer period create a negative sentiment for Gold as the attractive yields on US bonds overshadow Gold’s non-interest-bearing nature. This sentiment is expected to continue influencing Gold’s movements during the European trading session.
OIL
Oil (CLS10) prices slightly decreased to $66.72 per barrel on Tuesday after a sharp decline at the beginning of the week.
The drop followed President Trump’s decision to postpone sanctions on Russian crude oil buyers, allowing a 50-day window for Russia to reach a peace agreement before sanctions are imposed. This situation may put additional pressure on oil during the European trading session.
EURUSD
The EURUSD pair tumbled by 632 points (63.2 pips) to 1.15998 during trading on Tuesday, marking its lowest level in three weeks. The strong US dollar following the released inflation data exerted pressure on EURUSD, a trend likely to persist during the European session.
GBPUSD
GBPUSD fell for the eighth consecutive day, closing trading on Tuesday at 1.33787. Compared to Monday’s close, GBPUSD decreased by 424 points (42.4 pips), totaling about 270 pips over the 8-day decline.
The downturn followed the release of UK economic growth data, indicating contractions in April and May. This has led market participants to speculate that the Bank of England (BoE) may cut interest rates soon.
The release of UK CPI data at 13:00 WIB could also impact GBPUSD movements. The Trading Central forecast anticipates a 3.5% YoY increase in CPI for June, higher than the previous month’s 3.4% YoY, while core inflation is predicted to rise to 3.6% YoY, surpassing May’s figure of 3.5% YoY.
This economic slowdown coupled with rising inflation presents a dilemma for the BoE; if interest rates are not lowered, the economy may falter, whereas a cut could lead to even higher inflation. This scenario poses a negative sentiment for GBPUSD.
USDJPY
USDJPY surged by 1.107 points (110.7 pips) to 148.764 during trading on Tuesday, marking three consecutive days of gains totaling 260 pips. Today, USDJPY climbed again to 149.182, reaching a level not seen in 3.5 months.
This pair is benefiting from positive sentiment surrounding US CPI data, potentially leading The Fed to be cautious about lowering interest rates. Such sentiment is expected to influence USDJPY’s movements during the European trading session.
Nasdaq
The Nasdaq closed Tuesday’s trading slightly lower at 23,017 after previously climbing and hitting an all-time high of 23,221. The index was affected by profit-taking as the market anticipates The Fed may maintain high interest rates for a longer duration.
Given that the Nasdaq remains close to its all-time high, there is potential for further profit-taking during the European trading session.
