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USD/JPY drifts lower during the Asian session on Friday, retreating further from its highest level since July 2024, set the previous day. Minutes from the April BoJ meeting keep further policy normalization firmly on the table amid expectations for a pickup in inflation over the coming months, due to higher energy costs. This offsets Japan's softer National CPI print and lifts the Japanese Yen amid intervention fears, exerting some pressure on the currency pair.
AUD/USD holds above 0.7000 during the Asian session on Friday, though it remains close to the weekly low and seems poised to register modest weekly losses. The US Dollar sits near its highest level since May 2025 as the Fed's hawkish tilt overshadows optimism over the US-Iran peace deal, capping the currency pair. However, the RBA's signal that additional rate hikes were possible if inflation persists lends some support to the Aussie.
Gold attracts sellers for the third consecutive day and weakens below $4,200, hitting a fresh weekly low during the Asian session on Friday. Despite the latest optimism over a US-Iran peace deal, the Fed's hawkish tilt helps the US Dollar to preserve its strong weekly gains to the highest level since May 2025. This, in turn, undermines the non-yielding bullion and backs the case for further losses.
The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.
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