Fed Chair Powell Testifies, Dollar Falls post Israel-Iran Ceasefire

The US dollar is lower versus the major currency pairs after the cease-fire announcement between Israel and Iran late yesterday. In this video I take a look at the three major currency pairs, the EURUSD, USDJPY, and the GBPUSD from a technical perspective. What is the biases, the risks and the targets for each as the market works through the barrage of news from wars, to tariffs, to central bank policy including a more split Fed than what was perceived last week after the FOMC rate decision.

The biggest declines in the US dollar came against the Australian dollar (-0.74%) and the New Zealand dollar (-0.94%. The dollar moved down by -0.78% versus the Japanese yen and fell by -0.66% versus the British pound.,

Speaking of the Fed, Fed Chair Jerome Powell will testify on Capitol Hill about the Semiannual Monetary Policy Report before the House Financial Services Committee in Washington, D.C. He will repeat the testimony tomorrow in the Senate. Last week, the Fed kept rates unchanged, with the Fed chair indicating how tariffs and geopolitical tensions pose upside risks to inflation. That the Fed is in a good place. That he expects s spike in inflation from tariffs. In contrast, yesterday, FOMC Bowman sided with fellow board member Waller in keeping the door open for a July cut. Expect as Republican leaders to grill the Fed chair on his reluctance to cut interest rates.

Today, Atlanta Fed President Raphael Bostic reiterated his long-held stance that there is no need to cut interest rates at this time, maintaining his expectation for a single 25 basis point reduction later this year. He noted that business sentiment has improved somewhat, with firms indicating they can manage through tariffs for now, though many expect to raise prices eventually. Bostic acknowledged ongoing strength in the labor market and consumer spending but warned that inflation risks remain as firms exhaust options to delay passing on costs. With economic growth projected to slow to 1.1% and inflation expected to rise to 2.9%, Bostic’s tone remains consistent with prior statements and is slightly hawkish, while open to one cut, he emphasizes inflation risks and sees no need for immediate easing.

In geopolitical news, the Israeli/Iran 12-day war may extend to 13 days despite a ceasefire agreement. President Trump criticized Israel for launching an attack immediately after agreeing to a ceasefire, expressing strong disapproval and stating, “I did not like Israel ‘unloaded’ right after they agreed.” While noting that both Israel and Iran violated the truce, he stopped short of assigning full blame for its breakdown. Trump declared that Iran’s nuclear program has been dismantled and its capacities eliminated. Although he voiced frustration with both nations, he emphasized being particularly unhappy with Israel’s actions. More recently, it is reported that Pres. Trump talked with Israel’s Netanyahu said that the Israeli planes will turn around and head home.

Hope springs eternal, but we have seen Netanyahu’s tenacity once war starts. If he thinks there is nuclear capacity, he will be intent on destroying it, rightly or wrongly.

US stocks are higher to start the session as they react positively to the cease-fire news:

• Dow industrial average +312 points
• S&P index +51 points
• NASDAQ index +238 points

in the US debt market, yields are marginally higher after sharp declines yesterday:

• 2-year yield 3.842%, +1.3 basis points
• 5-year yield 3.897%, +1.3 basis points
• 10 year yield 4.339%, +1.8 basis points
• 30 year yield 4.884%, +2.6 basis points

In other markets, crude oil is trading lower by $2.43 and $66.08. That is down -3.52%. Yesterday the price extended all the way up toward $78 per barrel.

Gold is trading down $47 or -1.3% at $3321. Silver is up $0.11 or 0.32% at $36.13.

Bitcoin is little changed at $105,298 after trading below $100,000 over the weekend.