Weekly Outlook | Stronger Dollar impacting markets

Important events this week:

Financial markets continue to trade under the impact of geopolitical tensions. Talks in Geneva with European foreign ministers and their Iranian counterpart ended without significant results, yet the talks will continue as both sides hope. Potential results might cause gold prices to weaken and would also be a sign of easing for oil markets. They continue to rise as the tensions remain significant without an end in sight.

This week’s data remains limited but the amount of soft data like purchasing manager indices and the important releases like consumer prices might move markets. The focus should still remain on the geopolitical tensions.

– various Manufacturing PMI data – The purchasing manager indices from the Eurozone will be important for traders this week. The data in particular from France and Germany might shake up markets, should they not come out as expected. Germany’s manufacturing number is expected to follow at 48.9, which would be a slight rise compared to the figure last month. However, as the previous data was disappointing, traders should focus on this news event. The EUR might hence lose some momentum as the recent charting patterns shows.

EURUSD weekly chart

The weekly chart of the EURUSD currency pair shows a steady uptrend, which had emerged in March this year. Yet, after having tested higher levels, it seems that prices might not be able to break above the 1.1600 price zone for now. The slight strength of the Dollar might hence cap prices below that zone causing a potential push to the downside initially. Positive data, on the other hand, might cause the market to break above that zone. The purchasing manager index from the Germany will be published on the 23^rd of June, 2025 at 09:30 CET.

– US Core PCE price index– The Personal Consumption Expenditures price index is important as it will determine future moves of the Federal Reserve Bank and whether they will adjust interest rates. One might think that the Central Bank will reduce rates should prices fall but Jerome Powell pointed out several times that he will only cut rates if economic data weakens, which has so far not really been the case.

Dow Jones index weekly chart

The Dow Jones industrial index continues to rise towards previous levels and might test the 45.000 zone soon. Yet, currently the positive momentum had stopped and prices started to fall again. A higher price index might be another reason for falling prices. The Fed might hence remain in their rather hawkish mode, which would harm fresh inflows into the stock markets. Vice versa falling prices, like we have observed last month, will indicate that the upside momentum could be due to continue. The data from the US will be released on the 27^th of June, 2025 at 14:30 CET.