Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone
– May 27, 2025 –
“The US Dollar rose on Tuesday, reversing earlier losses, as upbeat consumer confidence figures and cautious Federal Reserve commentary ed the greenback. The Conference Board Consumer Confidence Index surged 12.3 points to 98.0 in May, its first increase after five consecutive monthly declines. The rebound was driven by the relief from US-China trade de-escalation.
Additionally, Durable Goods Orders fell by 6.3% in April, less than the expected 7.8% drop, suggesting less weakness than anticipated in the manufacturing sector despite uncertainty surrounding trading policies. Further ing the dollar, Federal Reserve Bank of Minneapolis President Neel Kashkari warned against dismissing the inflationary effects of recent tariffs. His remarks suggested that the Fed may resist immediate rate cuts, reinforcing a more hawkish stance compared to market expectations.
While these developments improve the short-term outlook for the greenback, lingering concerns over President Trump’s multi-trillion-dollar tax bill could limit gains. The bill is projected to add nearly USD 4 trillion to the national debt and may weigh on investor confidence as it advances in the Senate.
Looking ahead, markets will closely watch releases, including GDP, PCE inflation, and Friday’s FOMC Minutes, for clues on the Fed’s policy path.”
