Oil Surges, Tariffs Loom: June 2, 2025

Oil Surges, Tariffs Loom: June 2, 2025
On June 2, 2025, global markets are grappling with escalating trade tensions and geopolitical risks, boosting safe-haven assets. The Japanese Yen strengthens for the third consecutive day, pushing USD/JPY to 143.46, driven by BoJ rate-hike expectations and US fiscal concerns. EUR/USD rises to 1.1370, AUD/USD climbs to 0.6460, and NZD/USD nears 0.6000 as USD weakens (DXY at 99.50) post a softer US PCE (2.1% YoY). Gold holds above $3,310, supported by uncertainty, while WTI crude jumps to $61.45 after OPEC+’s third output hike. Key focus is on US ISM Manufacturing PMI and Fed Chair Powell’s remarks, with trade talks and Middle East tensions in the spotlight.

US Dollar Index Holds Near 99.50
Current Level: DXY trades near 99.50, flat.

Market Dynamics: US PCE inflation eased to 2.1% YoY in April (vs. 2.2% expected), with core PCE at 2.5%, reinforcing Fed rate-cut bets (September and December, per CME FedWatch). Trump’s tariff hike to 50% on steel/aluminum and US-China trade violations (per Reuters) fuel uncertainty, capping USD gains. US fiscal concerns (Moody’s Aa1 downgrade) and hopes for US-China talks (Bessent’s comments) limit upside. US ISM Manufacturing PMI (today) and Powell’s speech are critical.

Technical Outlook: Resistance at 99.80; support at 99.00. RSI near 50 signals neutral bias, awaiting PMI data.

Japanese Yen Strengthens, USD/JPY at 143.46
Current Level: USD/JPY trades near 143.46, down 0.4%.

Market Dynamics: Tokyo CPI (3.6% YoY) and core-core CPI (3.3%) exceed BoJ’s 2% target, fueling rate-hike bets (0.5% to 1% by 2026, per Reuters). Hopes for a US-Japan trade deal (Akazawa’s talks) and safe-haven demand (Ukraine-Russia, Gaza conflicts) bolster JPY. USD weakness post-PCE data adds pressure. BoJ’s June 17 meeting and US PMI are key.

Technical Outlook: Support at 143.00; resistance at 144.00 (200-period SMA). Bearish RSI below 50 eyes 142.10.

USD/JPY Forecast: Analysts on X see USD/JPY testing 142.00 if JPY strength persists, with trade deal progress critical. BoJ tightening could drive further JPY gains, per Long Forecast.

EUR/USD Rises to 1.1370
Current Level: EUR/USD trades near 1.1370, up 0.2%.

Market Dynamics: USD weakness and Trump’s 50% steel/aluminum tariffs lift EUR/USD, despite ECB’s dovish stance (Knot’s murky outlook). EU’s retaliation threat (per EC) and US-EU tariff delay (July 9) support EUR. Softer PCE (2.1%) and US fiscal concerns aid gains. US PMI and ECB’s Thursday meeting are focal points.

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Publication date:

02 June 2025 - 10:20 (GMT)

Technical Outlook: Resistance at 1.1400; support at 1.1300. RSI above 58 favors bulls, targeting 1.1450.

Australian Dollar Climbs to 0.6460
Current Level: AUD/USD trades near 0.6460, up 0.5%.

Market Dynamics: USD weakness and tariff concerns (50% on steel) boost AUD, despite weak ANZ Job Ads (-1.2%) and S&P Global PMI (51.0). China’s mixed PMI (Manufacturing 49.5, Non-Manufacturing 50.3) limits gains, but PBoC’s potential PSL boost supports sentiment. RBA’s dovish outlook (rate cuts likely) caps upside. US PMI and trade talks are key.

Technical Outlook: Resistance at 0.6537; support at 0.6445 (9-day EMA). RSI above 50 reinforces bullish bias, eyeing 0.6650.

NZD/USD Nears 0.6000
Current Level: NZD/USD trades near 0.6000, up 0.5%.

Market Dynamics: USD softness and tariff tensions lift NZD, a China-proxy currency. RBNZ’s neutral OCR (2.5%-3.5%, per Silk) and data-dependent stance limit losses. US-China trade disputes and US fiscal concerns support NZD. US PMI and ISM data are critical.

Technical Outlook: Resistance at 0.6050; support at 0.5900. RSI near 50 suggests neutral-to-bullish bias.

Gold Holds Above $3,310
Current Level: Gold (XAU/USD) trades near $3,310, up 0.3%.

Market Dynamics: Safe-haven demand from geopolitical risks (Ukraine’s drone attacks, Gaza bombardment, Yemen missile) and trade uncertainty (US-China, 50% tariffs) support gold. Softer PCE (2.1%) and Fed rate-cut bets limit USD-driven losses. US PMI and Powell’s remarks are key, with Chinese demand as a tailwind.

Technical Outlook: Resistance at $3,325; support at $3,280. RSI above 50 favors bulls, targeting $3,350.

Economic Data and Policy Focus
Today’s Data: US ISM Manufacturing PMI (forecast: 48.5, per X posts) and Powell’s speech are critical for Fed rate-cut clarity (49 bps by year-end). Japan’s Retail Sales (3.3% YoY) and BoJ’s June 17 meeting shape JPY expectations. ECB’s Thursday meeting looms.

Geopolitical Developments: Ukraine’s drone attacks, Russia’s missile strikes, Gaza bombardment, and Yemen’s missile attack boost safe-haven JPY, gold, and silver. US-Iran nuclear talks impact WTI.

US Fiscal Concerns: Trump’s $4T tax bill and 50% steel tariffs raise deficit fears (9% GDP by 2035, per Moody’s). Fed’s cautious stance (FOMC minutes) highlights stagflation risks.

US-China Trade Deal and Geopolitical Risks

Trade Status: Trump’s 50% steel/aluminum tariffs and US-China trade violations escalate tensions, though Bessent-Xi talks may ease disputes. US-Japan trade deal hopes (Akazawa’s talks) support JPY. EU’s retaliation threat adds volatility.

Geopolitical Tensions: Ukraine-Russia, Gaza, and Yemen conflicts drive safe-haven flows, while US-China trade disputes pressure AUD and NZD.

On June 2, 2025, JPY strength pushes USD/JPY to 143.46, while USD weakness lifts EUR/USD (1.1370), AUD/USD (0.6460), and NZD/USD (0.6000). Gold ($3,310) and silver ($33.10) gain, with WTI ($61.45) up on OPEC+ hikes. US PMI, Powell’s remarks, and trade developments will drive volatility, with geopolitical risks in focus.

Stay tuned for further updates.