Important calendar events
Last week, the dollar gained strength amid a blend of cautious Fed and geopolitical anxiety. The dollar rallied after last week’s Fed rate decision, and the dollar index climbed to 98.8 after hitting an annual low of 97.7 earlier in the week. U.S. Treasury yields remained flat, with the 10-year U.S. bond yielding approximately 4.40%.
The Fed held interest rates steady at 4.25–4.50% on Wednesday, as expected. The dollar rallied post-meeting as markets digested the Fed’s June decision and dot‑plot update.
The Fed updated its dot-plot, which summarizes policymakers’ projections of interest rates for the remainder of the year and into 2026. The Fed’s dot-plot maintained forecasts of two additional rate cuts in 2025, despite upward revisions to inflation expectations. Core PCE inflation is projected to rise to 3.1% by the end of the year, up from previous estimates of 2.8%.
The Fed also revised its economic projections. GDP forecast is down to 1.4% from 1.7% previously, unemployment is seen rising to 4.5%, above March’s projection of 4.4%.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again. Powell emphasized that inflation—especially hit by tariffs and rising oil—remains stubborn. He hinted that imminent easing is not on the cards, warning that “the cost of the tariff has to be paid and some of it will fall on the end consumer”.
Meanwhile, the crisis between Israel and Iran continued to escalate last week, fuelling the dollar’s rally. US strikes on Iranian nuclear sites and Iran’s parliament voting on closing the Strait of Hormuz raised safe-haven demand, boosting the dollar.
On the data front, US Retail Sales in May contracted by 0.9%, surpassing the 0.5% contraction expected. Core Retail Sales, which exclude the sales of automobiles, came in at −0.3% in May, missing expectations of 0.2% growth.
The US economy contracted by 0.2% in Q1 of 2025, marking its first quarterly decline in three years. This slight drop, revised from an earlier estimate of a 0.3% contraction, was primarily driven by the economic disruptions caused by President Donald Trump’s trade policies, causing a record surge in imports ahead of anticipated tariff hikes, which widened the trade deficit.
US headline inflation eased to 2.4% Year-on-Year in May, missing forecasts of 2.5%. Monthly CPI rose by just 0.1% against 0.2% expected. Core CPI, which excludes food and energy, held steady at 2.8% annually, missing estimates of 2.9%. Monthly core CPI rose by 0.1%, far softer than the 0.3% forecast.
This coming week, Fed Chair Powell’s two-part Congressional Testimony on June 24 (before the House) and 25 (before the Senate) will take the spotlight. Traders will scrutinize Powell’s testimony for hints on the Fed’s rate outlook.
In addition, key data releases this week are likely to cause volatility in the price of the dollar. Flash Services and Manufacturing PMI data on Tuesday will provide information on US private sector momentum. Final US GDP and unemployment data are due on Thursday.
Finally, Core PCE Price Index data on Friday are this week’s most highly anticipated fundamentals. This is the Fed’s preferred inflation gauge and is likely to affect the central bank’s rate outlook.
EUR/USD edged lower last week, dropping to 1.150 as the dollar rallied. If the EUR/USD pair declines, it may find support at 1.113, while resistance may be encountered near 1.163.
The Euro came under pressure last week as a hawkish Fed boosted the rivaling dollar. Eurozone fundamentals, however, came in strong, providing support for the Euro.
Final EU CPI data on Wednesday revealed Euro area inflation eased to 1.9% in May, dipping below the ECB’s 2% target and reinforcing expectations that the central bank is leaning toward a pause in rate cuts. Core CPI, which excludes food and energy, rose by 2.3% annually in May, down from a previous print of 2.7%. Cooling inflationary pressures are giving the ECB some leeway in its monetary policy decisions.
Upbeat German ZEW sentiment data provided support for the Euro last week. German ZEW Economic Sentiment jumped to 47.5 in June, far above forecasts of 34.8 and up from 25.2 in May. The ZEW economic sentiment index for the Euro area surged to 35.3 in June, well above the 23.5 forecast and April’s 11.6 print.
The ECB delivered another rate cut at its June meeting, lowering its main refinancing rate for the eighth consecutive time. ECB policymakers reduced the benchmark interest rate by 25 basis points to 2.5%. ECB President Christine Lagarde emphasized a data-dependent approach moving forward. ECB policymakers have expressed a cautious approach regarding future rate cuts and are moving towards policy normalization.
Eurozone GDP for the first quarter of 2025 was revised upward to reflect 0.6% expansion, up from 0.3% previously, beating the 0.4% consensus. The upward revision highlights resilience amid global trade headwinds.
The dollar rallied after last week’s Fed meeting on Wednesday, while the Sterling regained some ground after the BOE rate decision on Thursday. GBP/USD dipped to 1.341 but recovered slightly by the end of the week, rising to 1.342. If the GBP/USD rate goes up, it may encounter resistance at 1.363, while support may be found near 1.326.
GBP/USD plummeted after the Fed rate decision last Wednesday, but pared some losses after the BOE policy meeting on Thursday.
The sterling gained strength last week after Bank of England policymakers decided to hold rate cuts in a closely split vote. MPC members voted to keep interest rates steady at June’s meeting at 4.25%, with the vote split 6–3 in favor of holding rate cuts. Surprisingly, three policymakers voted for a 25 basis-point rate cut, with markets expecting no more than two dissenters and some analysts even predicting a unanimous hold in rate cuts.
BOE Governor Andrew Bailey’s post-meeting speech was slightly dovish, hinting at a gradual, data‑driven easing path, but cautioning that this isn’t a signal for an immediate rate cut. Bailey advocated for a slow and measured easing, highlighting labor market softness and rising energy risks tied to geopolitical instability.
Markets are pricing in a total of 75 bps worth of rate cuts this year, with the first cut expected in August or September.
On the data front, UK retail sales data on Friday showed an alarming drop of 2.7% in May, surpassing forecasts of a 0.5% decline and marking the steepest decline since December 2023. At the same time, April’s print was revised upward to reflect 1.3% growth.
British headline inflation surged to 3.5% year-on-year in April, up from 2.6% in March and surpassing forecasts of 3.3%. The hotter-than-anticipated inflation data have dampened hopes for rate cuts shortly, with markets currently pricing in only one additional cut in 2025.
UK GDP contracted by 0.3% in April, sharply missing estimates of a 0.1% drop. The UK economic outlook is declining, marking the steepest economic contraction in 18 months. Quarterly GDP data, however, has been more upbeat. The British economy grew by 0.7% in Q1 2025, outperforming forecasts of 0.6% growth and marking the fastest growth among G7 nations.
USD/JPY remained bullish last week, rising steadily from 144.3 to 146.2. If the USD/JPY pair declines, it may find support at 141.9. If the pair climbs, it may find resistance at 148.7.
The currency pair gained strength last week, driven mainly by the dollar’s rally. The Yen gained strength after the BOJ policy decision on June 17, but the dollar’s ascent was even steeper.
The Bank of Japan held its policy rate at 0.5% in June and confirmed a slowdown in its bond-buying taper beyond the fiscal year 2026. BOJ policymakers unanimously chose to slow the tapering of government bond purchases, cutting the quarterly pace by half starting in April 2026. This effectively signals a more gradual exit from the stimulus.
BOJ Governor Kazuo Ueda’s commentary struck a cautious tone, yet with growing emphasis towards Japan’s inflation. Ueda stressed that escalating global risks—like trade tensions and Middle East volatility—warrant a cautious policy shift. Ueda emphasized that future rate moves would be data-dependent and hinted at a readiness to raise interest rates should inflation continue to go up.
National Core CPI data released on Friday reinforced that notion. National core CPI came in at 3.7% Year on Year in May, surpassing expectations of 3.6% and marking the highest pace since January 2023. Tokyo Core CPI for May rose by 3.6% year-on-year, up from April's 3.4%, surpassing market forecasts of 3.5% and marking the highest level since January 2025.
Stronger-than-anticipated inflation data, combined with Ueda’s hawkish stance, raised market expectations of BOJ rate hikes, boosting the Yen.
Markets anticipate that the BOJ will raise interest rates at least one more time this year. The BOJ is expected to raise interest rates by approximately 75 basis points in the next two years, which will bring the central bank’s peak rate to 1.25%.
Japan's economy remained stagnant in the first quarter of 2025, exceeding the anticipated 0.2% decline. On an annualized basis, GDP shrank by 0.2%, compared to -0.7% in the previous reading. The BOJ may delay interest rate hikes further to support the country’s weakening economy, especially if trade tensions rise.
Gold prices gained strength early last week but were under pressure later in the week, dropping from $3,440 to $3,370 per ounce. If gold prices rise, they may encounter resistance at $3,450 per ounce, while if gold prices decline, support may be encountered near $3,120 per ounce.
Gold moved in a tight range last week, driven by geopolitical tensions and shifting central bank expectations.
Gold prices surged to multi-week highs early last week as the crisis in the Middle East escalated and investors turned towards safe-haven assets. Iran’s parliament voted on Sunday to potentially close the Strait of Hormuz in retaliation for US airstrikes on three of its nuclear sites last week.
Later in the week, gold prices dipped due to profit taking, combined with the dollar’s rally.
Gold prices have typically been directed by the dollar’s movement, as the competing dollar typically loses appeal as an investment when the dollar rises. The dollar rallied after last week’s Fed rate decision, and the dollar index climbed to 98.8 after hitting an annual low of 97.7 earlier in the week. U.S. Treasury yields remained flat, with the US 10-year bond yielding approximately 4.40%.
Gold prices are supported by rising Fed rate cut expectations. The Fed held interest rates steady at 4.25–4.50% on Wednesday, as expected. The dollar rallied post-meeting as markets digested the Fed’s June decision and dot‑plot update.
The Fed also updated its dot-plot, which summarizes policymakers’ projections of interest rates for the remainder of the year and into 2026. The Fed’s dot-plot maintained forecasts of two additional rate cuts in 2025, despite upward revisions to inflation expectations.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again.
Oil prices edged higher last week, and WTI rose to $75.3 per barrel by the end of the week. If oil prices retreat, they may encounter support near $60.0 per barrel, while resistance may be found near $80.0 per barrel.
Oil prices surged last week, with WTI prices rising above $75.0 per barrel on supply concerns. Concerns of potential supply disruptions across the Strait of Hormuz are pushing oil prices up.
The Middle East crisis escalated last week, with US and Israeli airstrikes hitting key Iranian nuclear facilities. Iran retaliated with waves of missiles and drones aimed at Israel. In addition, Iran threatens to close the Strait of Hormuz—a corridor carrying ~20 million barrels daily. Iran’s parliament voted on June 22 to close the Strait of Hormuz, which would disrupt major oil distribution routes.
In addition, the US Energy Information Administration announced a staggering 11.5M barrels draw for the week to Friday, June 13, raising supply concerns and boosting oil prices. This marks the largest drawdown in a year, far exceeding the modest 2.3M draw anticipated, signaling robust demand and tightening domestic supply.
Oil prices are kept in check by high central bank interest rates. The Fed held interest rates steady at 4.25–4.50% on Wednesday, as expected. The dollar rallied post-meeting as markets digested the Fed’s June decision and dot‑plot update.
The Fed also updated its dot-plot, which summarizes policymakers’ projections of interest rates for the remainder of the year and into 2026. The Fed’s dot-plot maintained forecasts of two additional rate cuts in 2025, despite upward revisions to inflation expectations.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again.
Bitcoin price rose to $108,700 early last week but plummeted later in the week, crushing through the $100,000 level support and approaching the key $98,000 barrier over the weekend. If BTC price declines, support can be found at $98,000, while resistance may be encountered at $110,500.
Ethereum suffered a similar fate, dipping from $2,640 early in the week to $2,180 over the weekend. If the Ethereum price declines, it may encounter support near $2,000, while if it increases, it may encounter resistance near $2,875.
Bitcoin tumbled below the $100,000 mark last week, as geopolitical jitters triggered a risk-off sentiment, driving cryptocurrencies down.
The key driver was the ongoing Israel-Iran conflict, as new airstrikes lowered the appeal of risk assets and had traders rushing to safety. The Middle East crisis escalated last week, with US and Israeli airstrikes hitting key Iranian nuclear facilities. Iran retaliated with waves of missiles and drones aimed at Israel. In addition, Iran’s parliament voted to close the Strait of Hormuz—a corridor carrying ~20 million barrels daily.
Strong inflows into Bitcoin ETFs helped to limit the drop somewhat early last week, but panic set in towards the end of the week, triggering a selloff of over $1 billion in liquidations on offshore platforms.
Cryptocurrency prices are affected by central banks’ interest rates. The Fed held interest rates steady at 4.25–4.50% on Wednesday, as expected. The dollar rallied post-meeting as markets digested the Fed’s June decision and dot‑plot update.
The Fed also updated its dot-plot, which summarizes policymakers’ projections of interest rates for the remainder of the year and into 2026. The Fed’s dot-plot maintained forecasts of two more rate cuts in 2025 despite upward inflation revisions.
Fed Chair Powell’s post-meeting press conference held hawkish undertones, hinting that policymakers remain cautious and are willing to wait before cutting interest rates again.
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Written by:
Myrsini Giannouli
चलनिधि प्रदाता के रूप में उद्योग उपस्थिति
और विश्वसनीय निष्पादन
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