Dollar Falls and Gold Slides After Iran-Israel Ceasefire. France: Debt Soars

The dollar is falling because Trump may replace Powell. Gold is sliding after the easing of tensions in the Middle East. France is in record public debt.

After a week of apparent calm, the ceasefire between Israel and Iran appears to be holding, easing fears of a new escalation in the region. President Trump has expressed optimism about the upcoming talks aimed at limiting Iran’s nuclear ambitions, helping foster a more stable market mood.

Meanwhile, the US economy is showing signs of slowing, with a weakening labor market and rising inflationary pressures linked to recent trade tariffs. Federal Reserve officials are considering a possible interest-rate cut in July, although some remain cautious about the economic outlook. According to analysts, without a significant rebound in productivity or a resolution of trade tensions, the American economy could continue to lose momentum. One positive note comes from international relations. Last Thursday, in fact, a White House official said the United States had reached an agreement with China to speed up shipments of rare earths to the US market. The deal comes as efforts continue to end the trade war between the world’s two largest economies.

On the foreign-exchange front, the US dollar fell sharply after reports that Donald Trump could announce far in advance a replacement for Federal Reserve Chair Jerome Powell, whose term expires in 2026. Markets interpreted the move as politically motivated, raising concerns about the Fed’s independence and suggesting a possibly more dovish future monetary policy stance. As a result, the price of gold fell sharply - also following the ceasefire between Iran and Israel - due to delays in interest-rate cuts in the United States, which dampened investor optimism. Markets are now focused on the next PCE inflation data, while uncertainty over Fed policy and Trump-era tariffs continues to weigh on the outlook.

In commodities, oil prices recorded their steepest weekly drop in two years, down by about 12%, thanks to the ceasefire between Israel and Iran, which eased concerns over supply in the region. Despite a slight rebound, demand-side signals, such as the fall in US crude inventories, helped stabilize prices. According to analysts, the risk of disruptions remains limited and prices are expected to stay within a narrow range, barring new geopolitical shocks.

In Europe, French public debt has reached a new high, surpassing €3.2 trillion - equivalent to about 112% of GDP - despite efforts to reduce the budget deficit. Some voices have speculated about possible IMF intervention, but that scenario appears unlikely, as France retains strong financing capacity and benefits from the flexibility allowed under EU budget rules. The government’s goal is to bring the deficit down to 5% of GDP in 2025 and below 3% by 2029, pairing the plan with structural reforms to spur growth. In the United Kingdom, retail sales fell by 3.1% in June, marking the sharpest monthly decline in more than two years. The drop was driven by lower consumer spending, both on groceries and discretionary goods. This deterioration adds to concerns about the British economy’s growth, increasing pressure on the government to tackle cost-of-living challenges and consider new fiscal measures.

Now embedded in many investment portfolios, the world of crypto-assets is seeing a rise in crime and raising alarm among experts. The Financial Action Task Force (FATF) is sounding the alarm: many countries are still lagging behind in regulating cryptocurrencies, while illicit wallets received as much as $51 billion in 2024. Despite some progress, only 40 of the 138 countries assessed are broadly compliant with FATF standards. The watchdog also notes that stablecoins are being used increasingly often by criminal networks, calling for coordinated, more forceful action at global level.