Hawkish Fed Supports Dollar (06.18.2026)

Global markets turned cautious on Thursday after a hawkish Federal Reserve meeting sparked a broad rebound in the U.S. dollar and Treasury yields.

The euro and pound retreated from recent highs, while gold and silver gave back part of their weekly gains. Although the U.S.–Iran peace agreement and the reopening of the Strait of Hormuz continue to support sentiment and ease inflation concerns, investors remain focused on Friday’s formal signing ceremony and lingering uncertainties surrounding nuclear negotiations. Meanwhile, the Bank of England decision and widening interest-rate differentials kept currency markets volatile.

Euro Retreats From $1.16 High

The euro reached a peak of $1.16 following a U.S.–Iran agreement to end their three-month standoff, but retraced toward $1.15 after yesterday’s hawkish Federal Reserve decision triggered a broad 1% dollar index rally. While the electronic signing of the accord will reopen the Strait of Hormuz and depress oil prices, markets remain cautious ahead of Friday’s formal ceremony in Switzerland due to unresolved nuclear details. Plummeting oil reduced inflation outlooks, causing derivatives markets to price in just 30 basis points of further ECB tightening this year. Meanwhile, ECB officials welcomed the diplomatic breakthrough but warned that a full supply recovery will take months.

The first resistance is positioned at 1.1560 while the support starts from 1.1500.

Gold Retreats Below $4,300

Spot gold early this week climbed past $4,320, riding a 2% gain fueled by the electronic signing of a temporary U.S.–Iran peace pact to restore Persian Gulf energy shipments. However, the metal subsequently shed 2%, slipping below $4,300 after a hawkish Federal Reserve decision supported the dollar and yields. In his debut meeting, Chairman Kevin Warsh held interest rates steady and skipped issuing a personal "dot," yet updated forecasts revealed half the FOMC expects a hike this year. Elsewhere, the RBA held its rate at 4.35%, while the BOJ hiked to 1%.

First resistance is seen at $4,350, with initial support near $4,260.

Yen Slides Toward 160.60

The Japanese yen weakened toward 160.60 per dollar on Thursday, depressed by a broad dollar rally following a hawkish Federal Reserve interest rate decision. Japan's strong trade data showed May exports jumped 17% year-on-year, driven by automotive and semiconductor demand. This followed the Bank of Japan’s recent 25-basis-point rate hike to 1% to stabilize the currency. However, internal policy divisions emerged as a dissenting board member highlighted growth and employment risks. With the Fed signaling potential future hikes and lifting U.S. yields, the wide interest rate gap fuels ongoing short-selling and carry trades.

Initial resistance stands at 160.80, while the first support is at 159.00.

Sterling Slips to $1.33

The British pound hit a peak past $1.34 following a preliminary U.S.–Iran diplomatic accord, but retraced to $1.33 after yesterday’s hawkish Federal Reserve decision supported the dollar. Meanwhile, ahead of today's Bank of England meeting, markets anticipate policymakers will split but hold interest rates at 3.75% to counter sticky inflation amid slower growth. Traders now price in just one more rate hike this year, deferred toward December. Additionally, today's Makerfield special election could also sway economic policy sentiment.

From a technical view, resistance stands near 1.3360, with support around 1.3280.

Silver Tests $70 Pivot

Silver prices stabilized near $70 per ounce, maintaining a 3% weekly gain as financial markets prepared for Friday's formal U.S.–Iran peace pact ceremony in Switzerland. The electronic agreement signed on Wednesday aims to normalize Persian Gulf shipping routes and immediately restart Iranian crude exports, reducing global inflation anxieties. However, the precious metal dipped slightly below the $70 mark following yesterday's hawkish Federal Reserve interest rate decision, which spurred a broad dollar recovery and exerted downward technical pressure on the commodities sector.

From a technical view, resistance stands near $70.40, while support is located around $68.25.