Forex Today: US-Iran talks called off, US Dollar extends rally to 13-month high
Here is what you need to know on Friday, June 19:
The US Dollar (USD) benefits from the risk-averse market atmosphere early Friday and builds on its weekly gains against its major rivals. In the second half of the day, April Retail Sales from Canada will be the only data featured in the economic calendar. Stock and bond markets in the United States (US) will remain closed in observance of the Juneteenth holiday. Hence, investors will pay close attention to headlines coming out of the Middle East and to comments from central bank officials.
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 British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.11% | 1.58% | 0.73% | 1.10% | 0.47% | 1.57% | 1.34% | |
| EUR | -1.11% | 0.43% | -0.39% | -0.02% | -0.66% | 0.44% | 0.22% | |
| GBP | -1.58% | -0.43% | -0.98% | -0.45% | -1.09% | 0.01% | -0.22% | |
| JPY | -0.73% | 0.39% | 0.98% | 0.36% | -0.27% | 0.87% | 0.60% | |
| CAD | -1.10% | 0.02% | 0.45% | -0.36% | -0.66% | 0.51% | 0.24% | |
| AUD | -0.47% | 0.66% | 1.09% | 0.27% | 0.66% | 1.11% | 0.89% | |
| NZD | -1.57% | -0.44% | -0.01% | -0.87% | -0.51% | -1.11% | -0.23% | |
| CHF | -1.34% | -0.22% | 0.22% | -0.60% | -0.24% | -0.89% | 0.23% |
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).
The Swiss Foreign Ministry announced earlier in the day that the upcoming US-Iran talks will not take place as planned. There was no official explanation from the US side but Vice President JD Vance's trip was cancelled after Israel launched an attack in southern Lebanon. Iran’s semi-official Tasnim news agency reported that there was no confirmation that Iranian negotiators would travel for talks, explaining that they first wanted to see that the condition about a ceasefire in Lebanon in the interim agreement is implemented.
After posting strong gains for the second consecutive day on Thursday, the USD Index extended its rally and touched its highest level since May 2025 above 101.10 early Friday. At the time of press, the index was trading modestly higher on the day at around 100.90.
The Bank of England maintained its bank rate at 3.75% following the June meeting, as expected. Two members of the Monetary Policy Committee voted in favor of a 25 basis points (bps) rate hike. Still, GBP/USD remained under bearish pressure on Thursday and lost about 0.7%. The pair struggles to stage a rebound early Friday and trades near 1.3200. In the meantime, political developments in the UK put additional weight on Pound Sterling's shoulders. Reporting on the matter, "Labour mayor Andy Burnham cleared a path to ousting Prime Minister Keir Starmer on Friday after winning a parliamentary seat in northern England, a victory that could usher in a new bout of political instability in Britain," Reuters said.
EUR/USD trades at its lowest level since mid-March near 1.1450 in the European session on Friday.
Escrivá flags energy-driven inflation risks but plays down wage spiral fears
European Central Bank (ECB) policymaker José Luis Escrivá's 6.2/10 FXS Speechtracker score on Thursday stood notably above the 4.8/10 historic average, signaling a more attentive and mildly hawkish stance versus usual. Emphasis on energy costs spreading to services and transport, plus uncertainty around oil production recovery and oil prices, highlighted upside risks to Euro-area inflation and supported expectations that policy cannot turn decisively dovish yet. These remarks, however, failed to help the Euro gather strength.
The uncertainty surrounding the US-Iran talks weighs on Gold (XAU/USD) on Friday. After losing more than 1% on Thursday, XAU/USD stretches lower in the European morning and trades near $4,150.
The Japanese Yen continued to weaken against the USD on Thursday, with USD/JPY climbing to its highest level since July 2024 above 161.80. The pair corrects slightly lower but holds comfortably above 161.00 early Friday as investors remain on edge in anticipation of a possible intervention. Bank of Japan (BoJ) Deputy Governor Himino said on Friday that the Japanese central bank likely to keep hiking rates based on economic, price and financial trends. Himino noted that currency moves may impact inflation expectations, core inflation, so they will keep monitoring developments closely.
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.
(The story was corrected on June 19 at 08:14 GMT to note in the intro that the article is for June 19, not June 23.)
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.
