The US Dollar has demonstrated resilience and remains broadly rangebound, with upside risks emerging after strong US payrolls data reinforced a hawkish Federal Reserve narrative. OCBC has revised its forecast, now expecting no Fed rate cuts through 2026 and raising its 10-year US Treasury yield outlook to 4.55% by end-2026, citing stronger US growth relative to Europe and non-tech Asia as key drivers for a firm USD [1]. The Dollar's recent gains have paused, with attention shifting to the upcoming US CPI print for clearer signals on inflation [1][4].
Technical analysis shows the US Dollar Index (DXY) trading slightly lower at around 99.90, down 0.1% in the European session, as renewed hopes for a US-Iran deal weigh on the currency. President Donald Trump indicated negotiations with Tehran are in 'final throes,' potentially reopening the Strait of Hormuz within days, which could ease energy prices and reduce USD strength driven by inflationary pressures [4]. Despite this, the near-term bias for the Dollar remains bullish, supported by a rising 20-day EMA at 99.30 [4].
The Euro has continued its downtrend against the US Dollar, with UOB analysts describing recent price action as short-term consolidation between 1.1505 and 1.1555 after a sharp drop. The bearish outlook persists, targeting further weakness toward 1.1445, with 1.1600 acting as strong resistance. A break below 1.1555 could open the way to the 1.1390/1.1410 support zone [2]. Similarly, the Australian Dollar is stabilizing intraday between 0.7015 and 0.7065 but retains a negative bias, with downside risks toward 0.7000 and significant support near 0.7040 [3].
Gold has come under pressure, breaking below its 200-day moving average due to hawkish Fed repricing and oil-led inflation fears. OCBC has trimmed its end-2026 gold forecast to USD5,100/oz from USD5,350/oz, though structural bullish drivers remain intact and the uptrend is considered delayed rather than reversed. EM policy risks and higher yields continue to weigh on safe-haven demand, with central banks potentially mobilizing gold reserves to defend currencies [5].
The New Zealand Dollar has outperformed, holding gains for a second day and trading around 0.5830, supported by robust China Trade Balance data. China's trade surplus widened to $105.43 billion in May, with exports surging 19.4% YoY and imports up 27.4% YoY, far exceeding expectations [6]. The NZD/USD pair benefited from USD weakness following de-escalation between Iran and Israel, though ongoing geopolitical tensions and strong US jobs data have fueled inflation fears and heightened expectations of Fed rate hikes. The probability of a December quarter-point hike has risen to 43%, up from 14% a month ago, with markets awaiting US CPI and PPI data for further direction [6].
CONCLUSION
The US Dollar remains firm amid hawkish Fed repricing and strong US economic data, while the Euro and Australian Dollar continue to weaken. Gold's uptrend is delayed due to higher yields and inflation fears, and the New Zealand Dollar outperforms on strong Chinese trade data. Market participants are closely watching upcoming US inflation prints and geopolitical developments for further cues on Fed policy and currency movements.