Dollar is seeing a modest pullback in today’s trading, yet it remains the strongest performer for the week. Market activity has been relatively subdued in the absence of major data or headlines. Traders now turn their attention to the University of Michigan’s consumer sentiment and inflation expectations data due later today. These numbers could shed light on how recent tariff re-escalations are filtering into household confidence and inflation perceptions.
Elsewhere in FX, Loonie is holding second place for the week, while the British Pound follows in third. At the bottom end, Aussie continues to struggle at the bottom, while Yen and New Kiwi also underperform. Euro and Swiss Franc are trading in middle ground.
On the trade front, Japanese Prime Minister Shigeru Ishiba said today that US Treasury Secretary Scott Bessent assured him that ongoing tariff negotiations will yield a “good” outcome ahead of the August 1 deadline. Ishiba confirmed he is prepared to speak directly with President Trump if needed to protect Japan’s interests, though no date has been set for such talks.
Bessent reinforced the message on social media, saying a good deal is preferable to a rushed one and remains “within the realm of possibility.” The comments suggest some progress behind the scenes, but markets remain cautious given the lack of detail and the short runway before tariffs kick in.
Meanwhile, German Chancellor Friedrich Merz flagged that any tariff deal between the US and EU will likely be “asymmetrical,” citing American reluctance to include services in the negotiations. Merz stressed the importance of keeping tariffs low on both sides, but acknowledged that perfect balance is unlikely.
In Europe, at the time of writing, FTSE is up 0.16%. DAX is down -0.29%. CAC is up 0.04%. UK 10-year yield is up 0.004 at 4.663. Germany 10-year yield is up 0.016 at 2.695. Earlier in Asia, Nikkei fell -0.21%. Hong Kong HSI rose 1.33%. China Shanghai SSE rose 0.50%. Singapore Strait Times rose 0.67%. Japan 10-year JGB yield fell -0.026 to 1.533.
Japan CPI core cools to 3.3% on energy, but food and services prices still climb
Japan’s core consumer inflation slowed in June for the first time in four months, driven by easing energy prices. Core CPI, which excludes fresh food, decelerated from 3.7% yoy to 3.3% yoy, in line with expectations. While still above the BoJ’s 2% target — where it’s been since April 2022 — the moderation suggests waning energy cost pressures. Headline CPI also dipped to 3.3% from 3.5% in May.
However, underlying price pressures remain sticky. The core-core CPI, which excludes both fresh food and energy, rose from 3.3% yoy to 3.4% yoy, highlighting persistent inflation in services and food. Services inflation ticked up from 1.4% yoy to 1.5% yoy. Food prices excluding fresh items surged 8.2% yoy, up from 7.7% yoy. Rice inflation eased marginally but remains historically elevated at 101.7% yoy.
USD/CHF Mid-Day Outlook
Daily Pivots: (S1) 0.8011; (P) 0.8037; (R1) 0.8071; More….
Intraday bias in USD/CHF remains neutral for the moment. On the downside, break of 0.7946 minor support will indicate rejection by 0.8054 support turned resistance and retain near term bearishness. Retest of 0.7871 should be seen next and break will confirm larger down trend resumption. Nevertheless, sustained break of 0.8054 will suggest that rise from 0.7871 at least correcting the fall from 0.8475. Further rise should then be seen to 55 D EMA (now at 0.8146).
In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.
