Forex Today: US Dollar extends rally to fresh 13-month high
Here is what you need to know on Wednesday, June 24:
The US Dollar (USD) continues to gather strength against its major rivals midweek, supported by the risk-averse market atmosphere and growing expectations for a Federal Reserve (Fed) rate hike as early as September. The economic calendar will feature IFO business sentiment data from Germany. In the second half of the day, May New Home Sales data from the US will be released.
After closing in positive territory on Monday, the USD Index gathered bullish momentum and gained nearly 0.4% on Tuesday. The data from the US showed that the S&P Global Manufacturing Purchasing Managers' Index (PMI) and Services PMI improved to 55.7 and 51.3, respectively, in June. Both of these readings came in better than analysts' estimates and helped the USD outperform its rivals. At the same time, the sharp decline seen in Wall Street's major equity indexes, especially the Nasdaq Composite, further supported the currency. In the European morning on Wednesday, US stock index futures trade mixed, while the USD Index holds at its highest level since May 2025 near 101.50, rising about 0.15% on the day. According to the CME FedWatch Tool, markets are currently pricing in about a 70% probability that the Fed will raise the policy rate by at least 25 basis points (bps) by September.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.99% | 0.00% | 0.21% | 0.42% | 1.53% | 1.46% | 0.53% | |
| EUR | -0.99% | -0.97% | -0.70% | -0.51% | 0.58% | 0.42% | -0.45% | |
| GBP | -0.01% | 0.97% | 0.02% | 0.41% | 1.50% | 1.41% | 0.50% | |
| JPY | -0.21% | 0.70% | -0.02% | 0.15% | 1.28% | 1.20% | 0.24% | |
| CAD | -0.42% | 0.51% | -0.41% | -0.15% | 1.11% | 1.05% | 0.08% | |
| AUD | -1.53% | -0.58% | -1.50% | -1.28% | -1.11% | -0.10% | -0.96% | |
| NZD | -1.46% | -0.42% | -1.41% | -1.20% | -1.05% | 0.10% | -0.89% | |
| CHF | -0.53% | 0.45% | -0.50% | -0.24% | -0.08% | 0.96% | 0.89% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
In the meantime, the United States and Iran continue to offer conflicting accounts about the nuclear discussions. While US President Donald Trump insists that Iran agreed to the highest level of inspections, Iran claims that they haven't discussed any details on the nuclear issues in the latest round of negotiations.
Annual inflation in Australia, as measured by the change in the Consumer Price Index (CPI), softened to 4% in May from 4.2% in April. This print came in below the market expectation of 4.4%. Commenting on the data, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser noted that inflation remains far too high and added that the central bank still has work to do. AUD/USD stays on the back foot and trades at its lowest level since early April near 0.6900 after losing more than 1% on Tuesday.
Pressured by the persistent USD strength, EUR/USD declines for the third consecutive day and trades at its weakest level since June 2025 near 1.1350.
GBP/USD stays in negative territory below 1.3200 in the European session on Wednesday after losing about 0.4% on Tuesday.
USD/JPY holds steady above 161.50 after closing virtually unchanged on Tuesday. Bank of Japan (BoJ) Governor Kazuo Ueda said on Wednesday that the monetary policy path will remain on the upside, citing risks to inflation overshooting the 2% target.
Gold extends its slide after losing nearly 2% on Tuesday and trades below $4,100, down about 0.8% on a daily basis.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
