📉 Dollar Rally Pauses Ahead of FOMC, Risk Aversion Persists
Geopolitical Tensions and Central Bank Events Converge at a Critical Juncture
In today’s Tokyo session, the U.S. dollar is facing corrective selling after a steady rise earlier this week. This reflects pre-FOMC position adjustments and caution over lower liquidity ahead of tomorrow’s U.S. holiday, Juneteenth.
The dollar index is hovering near its 10-day moving average, and the medium- to long-term trend of dollar weakness remains intact.
🏛 FOMC on Hold? Market Focus Turns to the Dot Plot and Trump’s Reaction
The consensus for this FOMC meeting is a rate hold (fully priced in). The key focus will be any changes in the dot plot—the Fed members' projections for future interest rates.
If the previous projection of two rate cuts this year is revised, it could trigger volatility as markets adjust to the shift.
Another focal point is how Chair Powell comments on the inflationary impact of Trump's proposed tariffs.
Should his remarks trigger a backlash from Trump, markets could react sharply and immediately.
🌍 Middle East Risks Still Simmering
Trump Reportedly Considers Striking Iran’s Underground Nuclear Sites
Meanwhile, in the Middle East, speculation is growing over whether the U.S. might launch military action against Iran’s underground nuclear facilities.
With nuclear talks stalled, Trump may push for a decisive resolution, raising the possibility of geopolitical shocks shaking the markets again.
Iran’s Supreme Leader Ayatollah Khamenei is scheduled to deliver a televised speech today, and any aggressive tone or announcement could trigger sudden market moves.
📆 Key Events & Economic Data Today
| Time Zone | Event / Indicator | Importance |
|---|---|---|
| Europe | Eurozone Current Account (Apr), Final HICP (May) | ★★ |
| South Africa | CPI (May), Retail Sales (Apr) | ★★★ |
| U.S. | FOMC Rate Decision (Hold Expected) | ★★★★★ |
| U.S. | Fed Chair Powell’s Press Conference | ★★★★★ |
| U.S. | Housing Starts / Initial Jobless Claims (May) | ★★★ |
| U.S. | MBA Mortgage Applications, TIC Data (Apr) | ★★ |
| Global | Speeches by ECB Members & Central Bankers (Germany, France, Italy, Netherlands, Spain, Portugal) | ★★★ |
| Canada | BoC Governor Macklem’s Press Conference | ★★★ |
| Brazil | Central Bank Rate Decision | ★ |
📝 Trader’s Notes
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Powell’s press conference will likely outweigh the rate decision itself—focus on any mentions of “inflation,” “tariffs,” and “rate cuts.”
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Be prepared to react swiftly to headlines from the Middle East, especially any remarks from Ayatollah Khamenei, which could spark volatility—particularly in yen crosses.
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With U.S. markets closed tomorrow, reduced liquidity could amplify price swings. Consider trimming short-term positions before the close.
