Forex Today: US-Iran talks called off, US Dollar extends rally to 13-month high
Here is what you need to know on Friday, June 23:
The US Dollar (USD) benefits from the risk-averse market atmosphere early Friday and builds on its weekly gains against its major rivals. In the second half of the day, April Retail Sales from Canada will be the only data featured in the economic calendar. Stock and bond markets in the United States (US) will remain closed in observance of the Juneteenth holiday. Hence, investors will pay close attention to headlines coming out of the Middle East and to comments from central bank officials.
The Swiss Foreign Ministry announced earlier in the day that the upcoming US-Iran talks will not take place as planned. There was no official explanation from the US side but Vice President JD Vance's trip was cancelled after Israel launched an attack in southern Lebanon. Iran’s semi-official Tasnim news agency reported that there was no confirmation that Iranian negotiators would travel for talks, explaining that they first wanted to see that the condition about a ceasefire in Lebanon in the interim agreement is implemented.
After posting strong gains for the second consecutive day on Thursday, the USD Index extended its rally and touched its highest level since May 2025 above 101.10 early Friday. At the time of press, the index was trading modestly higher on the day at around 100.90.
The Bank of England maintained its bank rate at 3.75% following the June meeting, as expected. Two members of the Monetary Policy Committee voted in favor of a 25 basis points (bps) rate hike. Still, GBP/USD remained under bearish pressure on Thursday and lost about 0.7%. The pair struggles to stage a rebound early Friday and trades near 1.3200. In the meantime, political developments in the UK put additional weight on Pound Sterling's shoulders. Reporting on the matter, "Labour mayor Andy Burnham cleared a path to ousting Prime Minister Keir Starmer on Friday after winning a parliamentary seat in northern England, a victory that could usher in a new bout of political instability in Britain," Reuters said.
EUR/USD trades at its lowest level since mid-March near 1.1450 in the European session on Friday.
Escrivá flags energy-driven inflation risks but plays down wage spiral fears
European Central Bank (ECB) policymaker José Luis Escrivá's 6.2/10 FXS Speechtracker score on Thursday stood notably above the 4.8/10 historic average, signaling a more attentive and mildly hawkish stance versus usual. Emphasis on energy costs spreading to services and transport, plus uncertainty around oil production recovery and oil prices, highlighted upside risks to Euro-area inflation and supported expectations that policy cannot turn decisively dovish yet. These remarks, however, failed to help the Euro gather strength.
The uncertainty surrounding the US-Iran talks weighs on Gold (XAU/USD) on Friday. After losing more than 1% on Thursday, XAU/USD stretches lower in the European morning and trades near $4,150.
The Japanese Yen continued to weaken against the USD on Thursday, with USD/JPY climbing to its highest level since July 2024 above 161.80. The pair corrects slightly lower but holds comfortably above 161.00 early Friday as investors remain on edge in anticipation of a possible intervention. Bank of Japan (BoJ) Deputy Governor Himino said on Friday that the Japanese central bank likely to keep hiking rates based on economic, price and financial trends. Himino noted that currency moves may impact inflation expectations, core inflation, so they will keep monitoring developments closely.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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