In recent days, the forex world has experienced a sequence of key events that could redefine the global currency landscape in the coming months. Risk to the dollar has become structural, the threat of tariffs is multiplying again, and the combination of geopolitical uncertainty and monetary policy creates an extremely risky mix for exchange rates.
Let's start with the Fed minutes: Jerome Powell attributed tariff risk to the main reason for postponing possible rate cuts. Market expectations are realigning toward a longer rate cycle, fueling a climate of global uncertainty. At the same time, Goldman Sachs warns that the dollar is increasingly moving as a "risky" currency, correlated with equity markets—an emerging market rather than a safe haven.
On the geopolitical front, President Trump has relaunched the trade war: announcements of tariffs of up to 35% on Canada, up to 20% on Europe, and 50% on copper from Brazil have caused futures volatility to soar and sent the dollar into a short-term rally. But Deutsche Bank is sounding the alarm: the summer period of low liquidity and rising trade tensions represents a potential trigger for prolonged currency turbulence.
The Financial Times envisions a scenario in which the dollar loses ground as the dominant currency, ushering in a multipolar currency world in which the euro, renminbi, gold, and even cryptocurrencies could gain ground.
The impact on Forex:
USD: The narrative is changing: no longer a net safe haven, but an asset correlated with political and risk cycles. The weakness of the DXY index in the first half of 2025 (-10%) reflects this transition.
EUR/USD: Potentially favored if the dollar continues its consolidation. However, new tariffs and US-EU uncertainty could provide temporary support for the greenback.
USD/JPY and USD/CHF: These crosses will be subject to greater volatility, with the next catalyst being the Fed minutes and the timing of tariffs. Safe-haven currencies strengthen during periods of uncertainty.
CAD, AUD, NZD: penalized by tariffs on Canada and Brazil and a weak dollar. OPEC+ and geopolitical tensions could boost commodities, but data confirmation is needed.
Commodity cross-correlation: USD/CAD could rebound if oil loses momentum, while AUD/JPY is sensitive to both the RBA and increased global risk.
Conclusion:
The current currency environment appears unstable and sensitive to political and trade developments. Summer volatility could persist, and those who can read the macro and institutional signals (Fed, tariffs, geopolitics) will have the opportunity to enter accurately. Until a stable direction emerges, EUR/USD looks like the most interesting cross to capture a potential structural correction in the dollar.
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If you're looking for:
✅ Precise TAKE PROFIT
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🚀 Telegram Channel: t.me/swipeuptrading
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Start investing like the banks — for free.
✅ Precise TAKE PROFIT
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✅ Real-time Trade Updates
🚀 Telegram Channel: t.me/swipeuptrading
👉 MY WEBSITE: andrearussoforextrader.com
Start investing like the banks — for free.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.