Rising Treasury Yields Continue to Support the US Dollar
The US dollar remained near its highest level in almost a year on Tuesday (June 23), supported by growing expectations that the US Federal Reserve may raise interest rates again later this year.
Investor sentiment toward the dollar strengthened as US Treasury yields stayed elevated, particularly the two-year Treasury yield, which is highly sensitive to interest rate expectations. Financial markets currently estimate a 75% probability that the Federal Reserve could implement another rate hike by September.
Several major financial institutions, including Bank of America and Deutsche Bank, have also revised their outlooks, now expecting tighter monetary policy before year-end as the US economy continues to show resilience.
As a result, the US Dollar Index remained close to its recent one-year high, reflecting continued demand for the greenback amid global market uncertainty.
Japanese Yen Remains Under Pressure
The Japanese yen continued to weaken against the US dollar, trading near levels not seen since 1986. Market participants are closely watching whether Japanese authorities will intervene to support the currency if depreciation continues.
Reports indicate that Japanese and US finance officials recently discussed foreign exchange market developments, although no concrete intervention plans have been announced.
Euro and Pound Trade Steadily
Meanwhile, the euro remained near a three-month low following comment from European Central Bank officials that helped ease concerns about inflation risks.
The British pound traded relatively stable as investors assessed the political transition following the resignation announcement of UK Prime Minister Keir Starmer.
Commodity-linked currencies such as the Australian and New Zealand dollars also edged lower amid cautious market sentiment.
Oil Market Remains in Focus
Oil prices recovered modestly after recent declines as investors continued monitoring developments surrounding US-Iran peace discussions and the future stability of energy shipments through the Strait of Hormuz.
Energy prices remain an important factor influencing inflation expectations, central bank policies, and global currency movements.
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