Forex Today: US Dollar extends Fed-inspired rebound, ECB next to unveil policy

Here is what you need to know on Thursday, June 15:

The US Dollar (USD) continues to gather strength against its rivals early Thursday, supported by the Federal Reserve's hawkish guidance. The European Central Bank (ECB) will announce monetary policy decisions later in the day. The US economic docket will feature May Retail Sales, Philadelphia Fed Manufacturing Survey for June and the weekly Initial Jobless Claims data. 

As expected, the Fed left its policy rate unchanged at 5-5.25% range following the June policy meeting, explaining that holding the target range steady will give them time to assess additional information and implications for the monetary policy. More importantly, the Summary of Economic Projections showed that the terminal rate projection for end-2023 got revised higher to 5.6% from 5.1% in March, implying two more rate hikes in 2023. Moreover,  end-2024 rate forecast rose to 4.6% from 4.3%.

Although FOMC Chairman Jerome Powell refrained from committing to rate increase in July, the hawkish dot plot helped the USD, with the US Dollar Index recovering back above 103.00. 

The ECB is widely anticipated to raise key rates by 25 basis points. ECB President Christine Lagarde will comment on the policy outlook and respond to questions from the press in a news conference starting at 1245 GMT. After having climbed to its highest level in nearly a month above 1.0860 on Wednesday, EUR/USD stays on the back foot early Thursday and declines toward 1.0800.

GBP/USD edged lower in the late American session but registered its highest daily close in over a year at 1.2670. The pair edges lower amid renewed USD strength early Thursday and trades in negative territory below 1.2650.

USD/JPY gathered bullish momentum in the Fed aftermath and climbed to its highest level since November above 141.00. The Bank of Japan will announce monetary policy decisions in the Asian trading hours on Friday.

The data from Australia showed that the Unemployment Rate edged lower to 3.6% in May from 3.7% in April. The Employment Change came in at +75,900, surpassing the market expectation for an increase of 15,000 by a wide margin. Upbeat employment data helped the Australian Dollar (AUD) stay resilient against the USD. As of writing, AUD/USD was trading modestly higher on the day above 0.6800.

Gold price came under renewed bearish pressure and fell to its weakest level since mid-March at $1,930 before recovering modestly. The benchmark 10-year US Treasury bond yield rose above 3.8% and weighed heavily on XAU/USD. 

Bitcoin turned south after the Fed event late Wednesday. BTC/USD continues to stretch lower and was last seen trading at a fresh two-month low below $25,000. Ethereum fell 5% on Wednesday and extended its slide early Thursday. At the time of press, ETH/USD was down nearly 1% on the day at $1,640.