USD weakens as Fed's Waller signals July rate cut possibility

The US dollar faced broad selling pressure following dovish comments from Federal Reserve Governor Christopher Waller, who expressed openness to discussing rate cuts as early as July. The Philadelphia Fed Business Index disappointed significantly, printing at -4.0 versus -1.0 expected, reinforcing economic slowdown concerns. Meanwhile, geopolitical tensions remained elevated with ongoing Israel-Iran diplomatic developments, though Iran's finance minister indicated readiness to consider diplomacy. Fed officials presented mixed views, with Barkin seeing no rush to cut rates while Daly described conditions as balanced. The dollar index retreated 0.4% as markets increased July rate cut probability to 65%. Technical indicators suggest further USD weakness possible if support at 104.20 breaks, with resistance now at 105.00. Traders should monitor upcoming US economic data and any escalation in Middle East tensions which could trigger safe-haven flows.