The Canadian dollar weakened past 1.37 per USD, as fresh US tariff threats and trade-policy uncertainty overwhelm earlier strength. President Trump’s announcement that he was terminating all trade discussions with Canada over its new digital services tax—and warning of imminent retaliatory tariffs—has rattled exporters and undermined confidence in near-term growth. Domestically, Canada’s economy was poised for back-to-back 0.1% monthly contractions in April and May, highlighting its vulnerability to US levies and dampening the outlook for trade-sensitive sectors. Meanwhile, oil prices remain subdued amid a stable Middle East, stripping the loonie of a key terms-of-trade support pillar. Although the Bank of Canada held its policy rate at 2.75%, citing sticky core inflation and signalling that further cuts are unlikely until disinflation is well-entrenched, this hawkish stance has been insufficient to counteract the combined drag of revived tariff fears.

Canadian Dollar Losses Ground After Trade Negotiation Fallout

The Mexican peso strengthened toward 18.81 per USD, reaching ten-month highs on the back of easing geopolitical strains, dovish signals from the Fed and resilient domestic fundamentals. Despite unemployment ticking up to 2.7% in May, the labour market remains historically tight, supporting consumption and incomes even as Q1 GDP contracted mildly, underpinning Banxico’s cautiously accommodative stance and continuing to attract carry flows. Banxico delivered a widely anticipated 50 bp cut to 8% despite 4.51% headline inflation—narrowing nominal differentials while preserving real yields and tempering volatility by tying further easing to incoming data. Externally, progress in US–China trade negotiations on rare-earth exports and President Trump’s repeated critiques of the Fed have lifted expectations of US rate cuts, weakening the dollar and further bolstering the peso.

Mexican Peso Strengthened to 10-Month High

The British pound rose 2% to $1.373 this week, marking its strongest weekly gain in nearly four months and hovering near a four-year high. The rally was driven mainly by a weaker US dollar, which lost momentum after initial strength during the Israel-Iran conflict faded. The dollar also slipped on concerns over the Federal Reserve’s independence amid speculation that President Trump may replace Chair Powell, raising expectations of earlier rate cuts. Domestically, the pound has been supported by the Bank of England’s reluctance to cut interest rates compared to peers like the ECB, as UK inflation remains sticky. Core inflation has shown little movement over the past year, causing concern among BoE officials and complicating rate cut decisions. Meanwhile, political tensions in the UK grew as Prime Minister Keir Starmer scaled back welfare reform plans in response to opposition from over 100 Labour MPs.

Sterling Books Best Week in 4 Months

The Brazilian real steadied around 5.49 per USD in June, hovering near its strongest level in eight months, as investors digested the latest labor-market data while the US dollar remained subdued. Unemployment dropped to 6.2% in the three months to May, from 6.6% in April, and formal employment hit a record 39.76 million, underpinning household consumption and real incomes. The data reinforced the central bank’s decision to hold the Selic at a historic 15%, as Copom’s minutes signaled a pause in tightening—emphasizing that rates will remain at that level for a “very prolonged period” to secure inflation convergence, sustain steep real interest-rate differentials and attract carry flows. Meanwhile, the USD dropped to its weakest level since February 2022 reflecting mounting Fed rate-cut expectations amid dovish Fed commentary, reinforced by softer consumer spending and modest inflation readings.

Brazilian Real Hovers at 8-Month Highs

The Canadian dollar stabilized around 1.365 per USD, after retreating from its eight-month low of 1.354 seen June 16th, as a softer greenback amid hopes for Fed easing continue to prop up most currencies even as the Canadian dollar pares a bit from its recent rebound. Domestically, the Canadian economy is likely set for a second consecutive monthly contraction of 0.1% in May, following a similar downturn in April, underscoring the economy’s vulnerability to US tariffs and trade uncertainty. At the same time, oil’s recent plunge, fueled by a stable Middle East ceasefire and ample US crude stocks, has trimmed a key support pillar for Canada’s terms of trade. Nonetheless, the Bank of Canada’s steady-as-she-goes stance, reinforced by persistent core inflation above target and hawkish forward guidance, has kept the Loonie buoyant.

Canadian Dollar Steady After Monthly GDP

USDDKK decreased to a near 4-year low of 6.35. Over the past 4 weeks, US Dollar Danish Krone lost 3.79%, and in the last 12 months, it decreased 8.73%.

Danish Krone Hits Near 4-year High

EURUSD increased to a near 4-year high of 1.17. Over the past 4 weeks, Euro US Dollar gained 3.98%, and in the last 12 months, it increased 9.61%.

Euro Hits Near 4-year High

The dollar index fell to 97.1 on Friday, its lowest level since February 2022, extending this week's drop to almost 2%, driven by mounting expectations of Fed rate cuts. Chair Powell struck a notably dovish tone during recent congressional testimony, suggesting that in the absence of inflationary pressures from tariffs, the Fed would have continued its rate-cutting cycle. Reports also suggested that President Trump may announce his pick for the next Fed Chair as early as September or October, potentially creating a “shadow” leadership structure that could guide monetary policy in a more dovish direction. Meanwhile, US economic data showed personal consumption expenditures fell 0.3% in May, the sharpest drop this year. The Fed’s preferred inflation gauge, core PCE (excluding food and energy), rose 0.2%, slightly above forecasts. As a result, the dollar weakened to a three-and-a-half year low against the euro and sterling, while hitting multi-month lows versus other currencies.

DXY Falls for 5th Session, Down Almost 2% this Week

The dollar index held steady at 97.2 on Friday, hovering near its lowest level since February 2022, after a four-day slide in which the greenback lost around 1.5%, driven by mounting expectations of Fed rate cuts. Chair Powell struck a notably dovish tone during recent congressional testimony, suggesting that in the absence of inflationary pressures from tariffs, the Fed would have continued its rate-cutting cycle. Reports also suggested that President Trump may announce his pick for the next Fed Chair as early as September or October, potentially creating a “shadow” leadership structure that could guide monetary policy in a more dovish direction. Fresh economic data further strengthened the case for Fed rate cuts, including a larger-than-expected 0.5% contraction in Q1 GDP and a rise in continuing jobless claims to their highest level since 2021. The dollar weakened to a three-and-a-half year low against the euro and sterling, while hitting multi-month lows versus other currencies.

Dollar Halts Decline

The Swiss franc traded around 0.80 per USD, reaching the highest since July 2011, supported by broad weakness in the US dollar amid growing expectations of Federal Reserve rate cuts and uncertainty surrounding trade deals ahead of President Trump's July tariff deadline. At the same time, the possibility of Trump announcing his Fed Chair nominee as early as September or October—potentially a ‘shadow’ figure with dovish leanings—has raised doubts about the Fed’s independence. Meanwhile, geopolitical risks remained under control, as Israel and Iran appeared to maintain the ceasefire. On the domestic front, the Swiss National Bank (SNB) cut interest rates to 0% to counter easing inflationary pressures and indicated it may move into negative territory if downside risks persist. In its Q2 Bulletin, the SNB warned that global trade risks could weigh on growth, forecasting GDP expansion between 1% and 1.5% this year.

Swiss Franc at 10-1/2-Year High

The offshore yuan weakened to around 7.16 per dollar on Friday, retreating from a near eight-month high reached in the previous session, as investors were left disappointed by the lack of details in the latest US-China deal. President Donald Trump announced on Wednesday that Washington had reached an agreement with China to expedite rare earth shipments to the US, as part of broader efforts to ease trade tensions between the world’s two largest economies. However, investors were left wanting more clarity, as no further details of the agreement were provided. Adding to the pressure on the yuan, data showed that China’s industrial profits fell 9.1% year-on-year in May — the sharpest decline in seven months — highlighting persistent headwinds facing the economy. Meanwhile, investors are closely watching the outcome of the concluding Politburo meeting for potential stimulus measures. Despite Friday’s losses, the currency remains on track to notch its fourth straight weekly gain.

Offshore Yuan Retreats, Still Poised for Weekly Gain

The Japanese yen held steady around 144.3 per dollar on Friday, near two-week highs, as the US dollar came under pressure amid growing expectations of deeper Federal Reserve rate cuts. The shift in sentiment followed reports that President Donald Trump may announce his pick for the next Fed Chair as early as September or October, potentially steering monetary policy in a more dovish direction. Fed Chair Jerome Powell also reinforced that tone in recent congressional testimony, suggesting the central bank would have continued easing were it not for tariff-driven inflation risks. Meanwhile, the White House downplayed the urgency of upcoming tariff deadlines, further easing investor concerns over a prolonged trade conflict. In Japan, investors weighed data showing Tokyo’s core inflation slowed in June, though it remained well above the Bank of Japan’s 2% target—sustaining expectations of further rate hikes by the BOJ.

Yen Holds Firm as Dollar Weakens on Dovish Fed View

The New Zealand dollar climbed to around $0.606 on Thursday, extending its rally for a fifth consecutive day and hovering near its highest level since October 2024, driven by a broadly weaker US dollar and a rebound in global risk appetite. The greenback retreated further amid rising expectations of Federal Reserve rate cuts, following reports suggesting that US President Donald Trump is considering announcing Fed Chair Jerome Powell's replacement by September or October, undermining Powell's position. Additionally, easing tensions in the Middle East — with the Israel-Iran ceasefire holding — boosted risk-sensitive currencies such as the kiwi. Meanwhile, investor focus is now shifting toward progress on trade negotiations ahead of the July 9 deadline for Trump’s reciprocal tariffs. For the week, the New Zealand dollar is on track to post a gain of more than 1%.

New Zealand Dollar Hovers Near 8-Month Peak

The South Korean won strengthened to around 1,356 per dollar on Friday, extending gains from the previous session as the dollar weakened amid expectations of a possible Federal Reserve leadership change between early September and late October, alongside growing investor focus on the upcoming July 9th deadline for a key trade agreement. Notably, the won’s advance remained resilient despite recent news regarding South Korea’s economic outlook, with growth projected to remain subdued at around 1% from 0.8% earlier this month. In response, Lee Yong-jae, director of the Korea Center for International Finance (KCIF), noted on June 26 that the combined effects of these tariffs, policy uncertainties, and weak domestic demand are expected to slow global economic growth in the second half of 2025.

SK Won Rises as Dollar Slips

The Australian dollar strengthened to above $0.655 on Friday, extending a five-session rally and reaching its highest level since November 2024, buoyed by broad US dollar weakness. The dollar index continued to fall to multi-year lows amid speculation of a potential leadership change at the US Fed Reserve, reinforcing bets of earlier rate cuts. The risk-sensitive Aussie also gained support from a mix of easing trade and geopolitical tensions. In the latest trade development, White House officials on Thursday downplayed the urgency of looming tariff deadlines and confirmed a framework agreement with China to expedite rare earth shipments, boosting demand prospects for key Australian exports. Investors now closely watched upcoming US-Iran nuclear talks, while the fragile Israel-Iran ceasefire appears to be holding. On the domestic front, attentions turn to next week’s May retail sales, which could reinforce concerns over Australia’s growth outlook and support the case of a July rate cut.

Australian Dollar Approaches 8-Month High

The US dollar index dropped toward 97 on Friday, hitting its lowest level since February 2022, as traders ramped up bets on Federal Reserve rate cuts. Reports suggested that President Donald Trump may announce his pick for the next Fed Chair as early as September or October, potentially creating a “shadow” leadership structure that could guide monetary policy in a more dovish direction. Adding to the pressure on the dollar, Fed Chair Jerome Powell struck a notably dovish tone during recent congressional testimony, suggesting that in the absence of inflationary pressures from tariffs, the Fed would have continued its rate-cutting cycle. Traders are now awaiting the latest PCE price index report, the Fed’s preferred inflation gauge, for further policy signals. Meanwhile, the White House helped ease market tensions by downplaying the importance of upcoming tariff deadlines, reducing fears of a prolonged trade conflict.

Dollar Sinks to Over 3-Year Lows

The Mexican peso strengthened toward 18.86 per USD, hovering at ten-month highs despite Banxico’s 50 bp rate cut to 8%, as widely telegraphed and occurred in a context of falling US Treasury yields and a softer dollar, which narrowed Mexico’s interest-rate differential only modestly. Global investors have been recycling into higher-yielding emerging-market assets after Fed signals of patience pushed the dollar index to two-year lows, while Mexico’s real-rate outlook remains among the most attractive in the G20 once adjusted for its 4.5% year-on-year headline inflation and 4.2% core CPI. Robust May trade and fiscal inflows, including a $1 billion external surplus and 7% revenue growth, have underpinned peso demand alongside signs of Q2 GDP expansion. Finally, Banxico’s pledge to re-tighten should inflation deviate from its 3% goal has reinforced confidence in its steady policy framework.

Mexican Peso Strengthens After Banxico

DXY decreased to a 3-year low of 97.00. Over the past 4 weeks, Dollar Index lost 2.52%, and in the last 12 months, it decreased 8.39%.

Dollar Index Hits 3-year Low

The Brazilian real firmed to 5.50 per USD, approaching its strongest level in eight months of 5.491 on June 19, as a softer dollar and robust domestic factors converged. Congress’s repeal of the IOF on portfolio flows eliminated a tax that had made foreign investment more expensive and widened demand for reais. Meanwhile, June’s mid-month inflation showed headline inflation at 5.27 %, under the 5.31 % consensus, confirming that price pressures are subsiding and cementing market bets that the Selic rate will remain at its current restrictive setting rather than climb. On the external front, the US economy’s surprise 0.5 % contraction in Q1 and Fed testimony stressing patience drove the dollar index down to its lowest since early 2022, spotlighting Brazil’s high real-rate differential. Strong inflows from pre-salt oil auctions and a rebound in agricultural exports have added to the real’s momentum.

Brazilian Real Gains Ground

AUDUSD increased to a 32-week high of 0.66. Over the past 4 weeks, Australian Dollar US Dollar gained 1.68%, and in the last 12 months, it decreased 1.48%.

Australian Dollar Hits 32-week High

The pound climbed above $1.374, its highest since October 2021, driven by a weakening US dollar. The dollar slipped amid concerns over the Fed’s independence and speculation that President Trump may soon name a successor to Chair Powell, raising the chance of earlier rate cuts. In the UK, BoE officials reaffirmed a downward rate path. Governor Bailey cited signs of slack in the labor market, including slower wage growth and rising inactivity, while Deputy Governor Ramsden said these factors led to his recent vote for a rate cut, warning inflation could fall below target. Meanwhile, the ongoing ceasefire between Israel and Iran reduced fears of a wider conflict, calming inflation concerns and boosting investor sentiment.

Sterling Highest since October 2021

The dollar index extended its decline to 97 on Thursday, marking its lowest level since February 2022, as expectations grow that the Fed may cut interest rates sooner than previously anticipated. The Wall Street Journal reported that President Trump is considering announcing his pick for the next Fed Chair as early as September or October, effectively installing a "shadow" chair who could influence sentiment and potentially steer policy in a more dovish direction. Trump has repeatedly criticized Chair Powell for maintaining current rate levels and not delivering further cuts. Market pricing now reflects 62bps of easing by the end of the year, slightly up from 61bps the previous day. Meanwhile, Fed Chair Powell testified before Congress, reiterating that interest rates should remain steady for now. He warned that tariffs could pose upside risks to inflation, justifying caution, but acknowledged that without those inflationary pressures, the Fed would likely have continued easing.

Dollar at 2022-Lows

The euro continued to appreciate, surpassing $1.17 and reaching a fresh 2021 high, bolstered by a general weakness in the dollar. The ceasefire between Iran and Israel is holding, boosting risk sentiment, while concerns about the Federal Reserve's independence emerged after reports that President Trump is considering an early appointment for the next Fed chair, putting pressure on the greenback. In parallel, NATO's decision to increase defense spending from 2% to 5% of GDP by 2035 has raised expectations that countries, particularly Germany, will ramp up borrowing to meet these targets. On the fiscal front, Germany has approved its 2025 budget and 2026 fiscal framework, which includes record investment plans aimed at stimulating growth. These plans feature increased spending and faster implementation than originally anticipated. Meanwhile, analysts continue to predict a 25-basis-point rate cut by the ECB before the year’s end.

Euro at 2021-Highs

The Japanese yen strengthened past 145 per dollar on Thursday, rebounding from the previous session’s losses as the US dollar weakened amid easing Middle East tensions and renewed expectations for Federal Reserve rate cuts. Market sentiment improved as US officials are set to meet with their Iranian counterparts next week in an effort to curb Tehran’s nuclear ambitions, while the ceasefire between Iran and Israel appeared to hold. Meanwhile, Fed Chair Jerome Powell reiterated that without the inflationary pressures from tariffs, the central bank likely would have continued cutting rates. Domestically, the Bank of Japan’s latest Summary of Opinions revealed a cautious policy outlook, with board members emphasizing the need to maintain an accommodative stance. The central bank reiterated that any future rate hikes would depend on whether its forecasts for growth and inflation materialize, citing persistent global trade and geopolitical uncertainties.

Japanese Yen Rises as Dollar Weakens

The offshore yuan strengthened to above 7.15 per dollar on Thursday, hitting its highest level since early November 2024, boosted by a broad US dollar weakness. The dollar index slipped to an over three-year low amid easing geopolitical tensions, expectations of Fed Reserve rate cuts, and rising fiscal concerns. While the dollar faces headwinds, Beijing is intensifying efforts to internationalize the yuan. The People’s Bank of China is establishing a new center in Shanghai to promote the digital yuan and has launched initiatives to encourage its use in global trade and finance. Premier Li Qiang’s optimism over China’s steady growth and shift toward a consumption-led economy further supported confidence in the currency. Analysts also suggest that the recent US–China tariff truce has provided stability to the yuan; however, attention is turning back to a looming reciprocal tariff deadline. Traders also looked ahead to next month’s Politburo meeting for clues of further economic stimulus.

Offshore Yuan Climbs Near 8-Month High

The New Zealand dollar strengthened to around $0.605 on Thursday, marking its fourth consecutive day of gains, driven by improving risk sentiment as a ceasefire between Israel and Iran continues to hold. The kiwi also benefited from a weaker US dollar amid renewed concerns over the US Federal Reserve’s independence. According to reports, President Donald Trump is searching for a successor to Fed Chair Jerome Powell. Trump’s frustration with Powell's "wait and see" approach to interest rates has reportedly prompted him to consider announcing his pick in September or October. Domestically, recent economic data, particularly better-than-expected Q1 GDP figures and a widening trade surplus, have supported the case that the Reserve Bank of New Zealand is approaching the end of its current easing cycle.

New Zealand Dollar Extends Rally

The South Korean won rose to around 1,355 per dollar on Thursday, pulling back from the previous session’s losses supported by the coordinated allied efforts by the US in response to escalating geopolitical tensions. This diplomatic initiative followed President Trump’s announcement at the NATO summit on Wednesday regarding upcoming high-level talks with Iranian officials, aimed at addressing and ultimately curbing Iran’s nuclear ambitions and reducing regional instability. Further bolstering the won’s upward trend, South Korea’s composite economic sentiment index rose to 92.8 in June from 87.5 the previous month, signaling an improved overall economic outlook driven by expectations of domestic recovery and policy support. Conversely, the business confidence index fell to 70 points, reflecting subdued domestic demand and lingering concerns over U.S. tariff measures.

South Korean Won Holds Gains on US-Iran Talks

The US dollar index fell to around 97.5 on Thursday, its lowest level in more than three years, as easing geopolitical tensions, expectations of Federal Reserve rate cuts, and rising fiscal concerns weighed on the currency. US officials plan to meet with their Iranian counterparts next week in a bid to curb Tehran’s nuclear ambitions, while the ceasefire between Iran and Israel appeared to be holding. On the policy front, Fed Chair Powell reiterated Wednesday that rates should remain steady for now, citing risks that the Trump administration’s tariffs could drive inflation higher. However, he acknowledged that absent those tariff concerns, the Fed would likely have continued easing. Traders are now pricing in over 60 bps of rate cuts by the end of the year, with the next move expected in September. Meanwhile, attention is turning back to trade negotiations ahead of Trump’s July 9 deadline, as well as efforts in Congress to finalize a tax and spending package due around the same time.

Dollar Languishes at Over 3-Year Low

The Australian dollar strengthened to around $0.652 on Thursday, marking its fourth consecutive session of gains to reach a one-week high, supported by improving risk sentiment driven by a fragile US-brokered Israel–Iran ceasefire. The truce appeared to hold, with traders closely monitoring upcoming US–Iran talks and broader Middle East tensions. President Trump confirmed a meeting next week but questioned the need for diplomacy, citing the damage from recent US airstrikes on Iran's nuclear sites. Investors also weighed Fed Chair Jerome Powell’s Wednesday statement, which indicated the central bank is in no hurry to cut interest rates. Domestically, the Aussie remained under pressure as softer inflation print and weaker-than-expected GDP reinforced expectations of a 25 basis point rate cut by the Reserve Bank of Australia in July. Markets are also pricing in a total of 73 basis points in cuts by year-end.

Aussie Dollar Rallies for 4th Session

USDSGD decreased to a 10-1/2-year low of 1.28. Over the past 4 weeks, US Dollar Singapore Dollar lost 0.59%, and in the last 12 months, it decreased 6.06%.

Singapore Dollar Hits 10-1/2-year High

The Mexican peso strengthened toward 18.9 per USD, nearing its ten-month high of 18.886 seen June 12th, driven by easing Middle East tensions and encouraging domestic inflation dynamics that bolster the case for sooner-than-expected rate cuts at Banxico. President Trump’s brokered Israel–Iran ceasefire, coupled with a restrained Iranian response that left Strait of Hormuz oil flows intact, undercut the safe-haven bid for the dollar and helped the peso claw back recent losses. At home, Mexico’s mid-June CPI report showed annual inflation at 4.51%, in line with forecasts and down from April’s peak, reinforcing market bets that Banxico will trim its key rate to 8.0% on Thursday.

Mexican Peso Rebounds

The dollar index was at the 98 mark on Wednesday, halting the slide that tested three-year lows yesterday as markets continued to assess the monetary policy outlook for the Federal Reserve. In his first testimony before Congress, Chairman Powell noted that the uncertain economic backdrop drove FOMC members to wait for clarity on trade policy before committing to a specific rate path. Still, Powell noted that the lack of tariffs favor the continuation of a disinflationary outlook, favoring rate cuts should the White House refrain from reintroducing tariffs on the July 9th deadline. In the meantime, oil and LNG tankers continued to navigate in the Strait of Hormuz despite the brief escalation of the conflict between Iran and Israel, triggering a plunge in energy prices and magnifying bets of lower inflation stateside. Externally, economic data continued to favor rate cuts by G10 monetary authorities, also preventing the further depreciation of the greenback.

US Dollar Index Halts Decline

The Indian rupee strengthened to 86 per USD, rebounding sharply from the three-month low of 87 touched on June 23rd as signs of de-escalation of geopolitical conflict in the Middle East limited the outlook of capital outflows from India and supported emerging market currencies. Israel and Iran have so far refrained from retaliating their latest strikes against each other and US rhetoric pointed to willing a ceasefire. Additionally, uninterrupted tanker flows through the Strait of Hormuz throughout the conflict drove oil prices to plunge, limiting the amount of rupees that Indian refiners and distributers must sell to import energy, thus supporting the currency. On the monetary policy front, the RBI is expected to continue cutting interest rates as the latest headline inflation print dropped more than expected to a six-year low. The central bank has already delivered three consecutive rate cuts after holding the rate at the over-four-year high of 6.5% for one full year.

Indian Rupee Rebounds on Softer Oil Prices

The offshore yuan weakened toward 7.17 per dollar on Wednesday, breaking a four-session winning streak, as positive sentiment toward China’s financial initiatives was clouded by ongoing conflict in the Middle East. Beijing unveiled fresh guidelines aimed at boosting domestic consumption through financial tools, with the goal of supporting employment, increasing household incomes, and stimulating broader economic growth. Investors are now turning their attention to the upcoming July Politburo meeting for potential indications of further economic stimulus. Meanwhile, the People's Bank of China injected CNY 300 billion into banks on June 25 via a one-year lending facility to maintain liquidity. On the geopolitical front, US President Donald Trump accused both Israel and Iran of violating a newly declared ceasefire, expressing particular frustration with Israel for launching major strikes on Iran. Earlier that day, Iran fired a barrage of missiles, resulting in four fatalities.

Offshore Yuan End 4-Session Winning Streak

The Japanese yen held steady around 144.8 per dollar on Wednesday, near a one-week high, as markets digested the Bank of Japan’s latest Summary of Opinions. Policymakers maintained a cautious stance on future policy adjustments, citing heightened uncertainty in the economic outlook. The central bank reiterated that any rate hikes would depend on whether its projections for economic growth and inflation are realized, while several members stressed the importance of maintaining an accommodative stance amid ongoing global trade tensions and geopolitical risks. On the trade front, Japanese negotiator Ryosei Akazawa is reportedly preparing for his seventh trip to the US as early as June 26 to press for the removal of US tariffs. Meanwhile, the US-brokered ceasefire between Israel and Iran appeared to hold despite isolated flare-ups. However, intelligence reports indicated that recent US missile strikes only partially damaged Iran’s nuclear facilities, delaying but not halting its program.

Yen Steady as BOJ Maintains Cautious Outlook

The New Zealand dollar rose to around $0.602 on Wednesday, marking its third consecutive session of gains, supported by a broadly weaker US dollar amid optimism over a shaky ceasefire between Israel and Iran. Both countries signaled that the air war between them had ended, at least for now, after President Donald Trump publicly scolded them for violating a truce he had announced. Meanwhile, US Federal Reserve Chair Jerome Powell maintained a cautious stance in his semi-annual testimony before Congress on Tuesday, reiterating that the Fed is in no hurry to cut rates. At home, data showed New Zealand’s trade surplus widened sharply in May compared to the same month last year, as export increased faster than imports. This followed last week’s release of better-than-expected Q1 GDP figures, which pointed to a strengthening economic recovery. These indicators supported the case that the Reserve Bank is nearing the end of its easing cycle.

New Zealand Dollar Gains for 3rd Day

The Australian dollar strengthened to around $0.650 on Wednesday, marking its third straight session of gains as investors digested softer-than-expected inflation figures. Headline CPI rose 2.1% year-on-year in May, easing from 2.4% in the prior three months and below market forecasts of 2.3%. Core inflation also slowed to 2.4% from 2.8%, the lowest since November 2021, keeping price pressures within the Reserve Bank of Australia's 2–3% target band. Combined with recent weaker-than-expected GDP data, these figures have bolstered expectations of a 25bps rate cut by the RBA in July, with markets now pricing in an 89% chance and a total of 73bps cuts by year-end. However, the Aussie gained support from improved risk sentiment following US President Trump’s announcement of a ceasefire between Iran and Israel. Still, caution remains as intelligence reports indicate recent US missile strikes failed to fully destroy key Iranian nuclear facilities, casting doubt on the ceasefire’s durability.

Aussie Dollar Firms Despite Softer Inflation Data

The South Korean won weakened to around 1,360 per dollar on Wednesday, retreating from the previous session's gains amid lingering uncertainty surrounding the stability of the ceasefire announced on June 24. Market attention was further drawn to reports indicating that Iran’s nuclear sites were unaffected, prompting ongoing speculation regarding the possibility of renewed tensions and the sustained effectiveness of the ceasefire. Adding to the downward pressure, investors took note of  Morgan Stanley Capital International’s (MSCI) annual classification review released Wednesday, which maintained South Korea’s emerging market status and was not designated for advancement in market classification. The global index firm underscored key areas for further development, such as improving the offshore convertibility of the Korean won and tackling persistent limitations within the onshore foreign exchange market, reflecting the country’s continuing efforts to enhance market accessibility.

SK Won Weakens on Uncertainty Over Ceasefire Stability

The US dollar index remained below 98 on Wednesday after falling for two straight sessions, weighed down by reduced haven demand amid easing geopolitical risks in the Middle East. A US-brokered ceasefire between Israel and Iran appeared to be holding despite minor flare-ups, with oil prices retreating sharply from recent highs. Still, geopolitical uncertainty lingered after intelligence reports suggested that US missile strikes only partially damaged Iran’s key nuclear facilities, merely delaying Tehran’s nuclear program. Meanwhile, investors digested fresh remarks from Fed Chair Powell, who reaffirmed the Fed’s commitment to keeping inflation under control. Powell indicated that rates are likely to remain unchanged until the impact of tariffs on prices becomes clearer. Despite this, markets continue to price in nearly a 20% probability of a rate cut as soon as July. Looking ahead, investors await Powell’s testimony before the Senate later in the day, alongside new home sales data.

Dollar Holds Decline Amid Easing Geopolitical Risks

USDCHF decreased to a 10-1/2-year low of 0.80. Over the past 4 weeks, US Dollar Swiss Franc lost 2.12%, and in the last 12 months, it decreased 10.19%.

Swiss Franc Hits 10-1/2-year High

USDCNY decreased to a 4-week low of 7.16. Over the past 4 weeks, US Dollar Chinese Yuan lost 0.18%, and in the last 12 months, it decreased 1.71%.

Chinese Yuan Hits 4-week High

The South African rand appreciated further to around 17.8 per USD, a level not seen since June 12, benefiting from a weakening dollar and an improving risk sentiment amid signs of de-escalation in Middle East tensions. This helped to ease inflation fears and supported expectations of interest rate cuts by the US Federal Reserve, with Fed Chair Powell keeping the possibility of a July cut on the table. Domestically, the South African Reserve Bank, in its latest biannual Financial Stability Review published on June 19, noted that growing geopolitical upheaval and global policy uncertainty are among the biggest risks facing the country's financial sector. However, Governor Lesetja Kganyago said South Africa's financial system was so far demonstrating a high degree of resilience in response to global shocks.

South African Rand Firms to Near 2-Week High

The British pound rose above $1.361, nearing its highest level since January 2022, as the US dollar weakened on expectations of Fed rate cuts and easing geopolitical tensions. Traders increased bets that the Fed may cut rates soon after Chair Jerome Powell said “many paths are possible” and noted that weak inflation or job data could prompt earlier action. In the UK, BoE Governor Andrew Bailey and Deputy Governor Dave Ramsden reinforced that rates are likely to fall, citing signs of slack in the labor market. Bailey pointed to slowing wage growth and rising economic inactivity, though he stressed concerns over the reliability of labor data. Ramsden said labor market loosening was behind his vote for a rate cut, warning it could push inflation below the 2% target. Meanwhile, markets closely monitored the fragile ceasefire between Israel and Iran, which helped ease fears of a broader conflict and potential inflationary shocks.

Sterling Rises Toward 2022-High

The US dollar index fell past 97.9 on Tuesday, testing the lowest in over three years as the continued flow of oil in the Middle East softened concerns of low inflation and supported bets of multiple Fed cuts this year. Israel and Iran reportedly launched new strikes shortly after agreeing on a ceasefire on Tuesday, but refrained from pledging any retaliation. This sustained the de-escalatory momentum after the seemingly controlled strikes between Iran and US forces the prior day, driving oil price to plunge as tankers continued to navigate through the Strait of Hormuz. The improved inflation outlook supported the outlook of two cuts by the this year. Elsewhere, Fed Chair Powell noted that pro-inflationary concerns from tariffs were partly responsible for the Fed refraining from cutting rates last meetings, backing bets of cuts should tariffs be tempered by President Trump's July 9th deadline.

US Dollar Index Tests 3-Year Low

The Brazilian real steadied around 5.49 per USD in June, hovering near its strongest level in eight months of 5.491 seen June 19th, as investors digested the latest central bank minutes while the US dollar weakened. At home, Copom’s minutes signaled a pending pause in the Selic tightening cycle, emphasizing that rates will remain at 15% for a “very prolonged period” to ensure inflation convergence, thereby anchoring expectations and sustaining Brazil’s attractive real interest-rate differential. Externally, President Trump’s announcement of a ceasefire between Israel and Iran and Iran’s restrained response, failing to disrupt Strait of Hormuz flows, eased oil-price spikes, tempering safe-haven demand and stripping support for the greenback. Finally, resilient commodity exports, buoyed by firmer iron ore and soybean prices in recent sessions, have underpinned trade-balance inflows, all of which has lent tangible support to the real.

Brazilian Real Steady Around 8-Month Highs

USDRSD decreased to a 3-1/2-year low of 100.77. Over the past 4 weeks, US Dollar Serbian Dinar lost 2.04%, and in the last 12 months, it decreased 7.77%.

Serbian Dinar Hits 3-1/2-year High

GBPUSD increased to a 3-year high of 1.36. Over the past 4 weeks, British Pound US Dollar gained 0.47%, and in the last 12 months, it increased 7.44%.

British Pound Hits 3-year High

The Canadian dollar traded around 1.37 per USD, stabilizing after retreating from its eight-month high of 1.357 seen June 16th as steady domestic inflation readings led to shifting monetary policy expectations and provided support for the loonie. Statistics Canada’s May CPI report showed headline inflation steady at 1.7% year-on-year, below the Bank of Canada’s 2% target for a second consecutive month, while the BoC’s trimmed-mean gauge remained elevated at 3%, prompting markets to dial back the pace of anticipated rate cuts. Simultaneously, US dollar weakness, driven by receding Middle East risk premia following Tehran’s limited strike on a Qatar base that left tanker traffic through the Strait of Hormuz unscathed. Finally, encouraging export figures and progress in US-Canada trade negotiations lent tangible support to cross-border capital flows, anchoring the loonie around current levels.

Canadian Dollar Steady After Inflation Data

The Swiss franc appreciated further to around 0.808 per USD, hovering around 2011-highs, bolstered by safe-haven demand and a weakening dollar on ceasefire concerns and geopolitical tensions. A ceasefire announced by President Trump late Monday appeared increasingly fragile after Israel accused Iran of violating the deal and pledged renewed military action against Tehran. Meanwhile, investors continued to assess the future path of interest rates. Two key Fed officials called for an interest rate cut as early as July if inflation effects from President Donald Trump's sweeping tariffs remain limited. Locally, the Swiss National Bank (SNB) cut its policy rate to 0% in its sixth consecutive reduction, amid falling price pressures and sustained upward pressure on the currency, raising speculation that interest rates could return to negative territory this year. However, concerns over potential negative consequences for key economic agents made the central bank reluctant to take such a step.

Swiss Franc Remains Strong

The US dollar index fell past 98.1 on Tuesday, approaching the three-year low of 97.6 touched on June 12th as markets assessed the impact that geopolitical conflict may have on US monetary policy and global trade. Israel and Iran reportedly threatened to launch new strikes shortly after agreeing on a ceasefire on Tuesday, jeopardizing the sustainability of de-escalation. This was after the seemingly controlled strikes between Iran and US forces the prior day settled without signals of more retaliation. In the meantime, oil price sank as tankers continued to navigate through the Strait of Hormuz, easing pro-inflationary concerns and supporting the case for multiple rate cuts by the Fed this year, pressuring the dollar. The Fed is currently expected to deliver two rate cuts this year, with the first coming potentially as soon as July.

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