USD index hits one-year highs as central banks look to hike
Geopolitics grabbed headlines last week as a US–Iran peace deal was signed, but the dominant driver was a stronger US dollar.
The Fed held rates at 3.5%–3.75%, but sharply shortened its statement. That shift likely reflects Chair Warsh’s scepticism toward heavy forward guidance and signals a broader rethink of Fed communication.
The USD index gained 1.4% last week, pushing to one-year highs as yield differentials moved further in favour of the greenback.
Globally, policy remains tilted hawkish. The Fed, RBA, Riksbank, Norges Bank and BoE all left the door open to further tightening if inflation proves sticky. The SNB remains the clear dovish outlier.
AUD/USD remains in a medium-term downtrend, although downside momentum is easing, as seen in indicators like RSI and MACD. Support sits near 0.7000, with resistance at 0.7050/0.7080.
NZD/USD is still trending lower, approaching key support at 0.5700, with resistance at 0.5775/0.5820.
The US dollar was stronger in Asia, with USD/SGD climbing to its highest level since September. USD/CNH climbed to its highest level in one month.
BoJ flags stronger FX pass-through
The USD’s gains in Asia were helped by a weaker Japanese yen.
BoJ Deputy Governor Himino reinforced a tightening bias on Friday and stressed that officials will keep a close eye on FX moves. He said currency swings now feed into inflation more strongly, as firms have become quicker to adjust prices. Himino added that underlying inflation is closing in on the BoJ’s 2% target, but warned it could push higher as pricing behaviour continues to shift.
His remarks followed a sharp move in USD/JPY, which jumped to 161.81 a day earlier after firmer Fed signals. In a separate comment, Finance Minister Satsuki Katayama said authorities stand ready to act decisively against speculative FX moves.
On the data front, May national CPI rose 1.5% y/y, up from 1.4% previously.
USD/JPY remains above the key 160 level, trading about 0.3% below its 18 June high of 161.81. Near-term support sits at the 21-day EMA around 160.10, followed by the 50-day EMA at 159.34. Resistance remains at 161.81.
China rates, Aussie CPI and jobs in focus
The People’s Bank of China anchors Monday with its 1- and 5-year Loan Prime Rate decisions, both seen steady at 3.0% and 3.5%. Any surprise would ripple through Asian currencies and risk sentiment.
Price data dominates, with Singapore CPI and Australian CPI due Tuesday and Wednesday, alongside Japan’s Tokyo CPI on Friday. The marquee release is US PCE on Thursday — headline last at 3.8% and core at 3.3% — the Fed’s preferred gauge and the week’s likely volatility driver for the dollar.
The US delivers its third estimate of Q1 GDP on Thursday, last at 1.6%, with durable goods orders providing a read on business investment. Australia’s May employment report the same day, following a soft -18.6k prior, will shape RBA expectations and the Aussie.
Flash June PMIs across Japan, the eurozone, the UK and US land Tuesday, offering an early activity pulse. The week closes Saturday with University of Michigan sentiment, last at 48.9, capping a data-dense stretch for positioning.USD index hits one-year highs as global rates rise
USD at one-year highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22-27 June
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
