The euro fell in European trading on Friday against a basket of global currencies, extending its losses for a third consecutive session against the US dollar and hitting its lowest level in three months. The decline comes amid broad selling pressure across major currencies and growing investor demand for the US dollar as the most attractive available investment, particularly following the hawkish Federal Reserve meeting, which significantly strengthened expectations for a US interest rate hike in December.

After the European Central Bank reiterated at its latest meeting that it is not committed to a predetermined path for monetary policy or interest rates, investors are awaiting additional key economic data from the euro area to reassess expectations for European interest rates.

The Price

• Euro exchange rate today: The euro fell 0.3% against the dollar to $1.1423, its lowest level since March 16, from today's opening level of $1.1458. The session high was recorded at $1.1466.

• The euro ended Thursday down about 0.4% against the dollar, marking its second consecutive daily loss, following the outcome of the Federal Reserve's first monetary policy meeting under Kevin Warsh.

US dollar

The US Dollar Index rose 0.3% on Friday, extending gains for a third consecutive session and reaching a 13-month high of 101.10 points, reflecting continued broad-based strength in the US currency against a basket of major and minor currencies.

The advance comes as investors continue to favor the dollar as the most attractive available investment, especially after the Federal Reserve's latest meeting, which was more hawkish than markets had anticipated.

At its first monetary policy meeting under Kevin Warsh, the Federal Reserve raised its inflation and policy rate forecasts for the current year, signaling that inflationary pressures remain persistent. The Summary of Economic Projections also showed that 9 of the 18 policymakers expect at least one interest rate increase before the end of 2026.

Following the meeting, according to CME Group's FedWatch Tool, market pricing for the Federal Reserve to leave interest rates unchanged at its July meeting fell from 91% to 72%, while the probability of a 25-basis-point rate hike increased from 9% to 28%.

Market pricing for the Federal Reserve to keep rates unchanged at its December meeting also declined from 45% to 15%, while expectations for a 25-basis-point rate increase rose from 55% to 85%.

European interest rates

• Reports: The European Central Bank is considering pausing monetary policy normalization in July if energy prices remain at current levels.

• Amid declining oil prices, money markets reduced the probability of a 25-basis-point ECB rate hike in July from 50% to 30%.

• Money market pricing for a 25-basis-point ECB rate increase in September also declined from 70% to 50%.

• Investors are awaiting further economic data from the euro area, particularly inflation, unemployment, and wage figures, to reassess the above expectations.

The Japanese yen rose against a basket of major and minor currencies in Asian trading on Friday, attempting to recover from a two-year low against the US dollar. The currency is on track to post its first gain in six sessions, supported by bargain buying activity and growing expectations that Japanese authorities may intervene to support the local currency as it approaches levels not seen since 1986.

Data released in Tokyo today showed that Japan's core inflation rate remained steady in May, in line with market expectations, despite ongoing concerns over rising energy prices.

The data comes as a deputy governor of the Bank of Japan warned of the risk of inflation exceeding the official target over the medium term, keeping the possibility of further monetary policy tightening on the table in the coming period.

The Price

• Japanese yen exchange rate today: The dollar fell 0.25% against the yen to ¥160.99, from today's opening level of ¥161.37, after reaching a session high of ¥161.42.

• The yen ended Thursday down about 0.5% against the dollar, marking its fifth consecutive daily loss. It touched a two-year low of ¥161.81 as continued demand for the US currency persisted amid its appeal as the most attractive available investment.

Japanese authorities

Japanese authorities are closely monitoring movements in the local currency market, particularly as the yen nears its weakest levels in 40 years after breaking above the key ¥160-per-dollar threshold. The level is widely viewed as a red line that could prompt Japanese authorities to intervene once again to support the currency.

Sources told Reuters that Tokyo intervened several times in late April and early May to halt the yen's decline. At the time, the exchange rate reached ¥160.72 per US dollar, its weakest level since July 2024.

Japanese officials have warned against excessive volatility in the yen and indicated that authorities could take decisive action against disorderly moves in the foreign exchange market.

Finance Minister Satsuki Katayama stated that the government is "prepared to take appropriate action" if currency markets experience excessive or speculative movements.

Views and analysis

Tony Sycamore, market analyst at IG, said: "We believe Japan's Ministry of Finance will likely defend the ¥161.95 level, using spending power similar to what we saw in April and May, around ¥11.7 trillion."

Sycamore added: "That means they would be using roughly 11-12% of Japan's total foreign exchange reserves within a relatively short period of time, for only a limited impact on the currency market."

He further explained: "At that stage, authorities would need to be more selective about any future interventions, ensuring they preserve both flexibility and credibility while retaining sufficient reserves to address potential future pressures."

Core inflation

Data released in Tokyo today showed that Japan's core consumer price index rose 1.4% in May, matching market expectations for a 1.4% increase. The index had also risen 1.4% in April, marking the slowest pace of growth since March 2022.

The figures clearly indicate easing inflationary pressures on Bank of Japan policymakers, reducing the likelihood of another Japanese interest rate hike this year.

Bank of Japan deputy governor

Bank of Japan Deputy Governor Ryozo Himino said on Friday that inflation could exceed the bank's 2% target and pointed to the cost of delaying interest rate increases, reaffirming the central bank's commitment to continuing to raise borrowing costs.

Japanese interest rates

• The Bank of Japan raised its benchmark interest rate by 25 basis points on Tuesday to 1.0%, the highest level since 1995, in another historic step toward normalizing monetary policy in the world's fourth-largest economy.

• Bank of Japan Deputy Governor Shinichi Uchida said the central bank will continue to raise interest rates gradually in response to developments in economic activity and prices, noting that policymakers will not rush into abrupt monetary tightening.

• Economic surveys indicate that the most likely and baseline scenario is for the Bank of Japan to raise interest rates by an additional 25 basis points in December.

• Market pricing for a quarter-point rate increase at the Bank of Japan's July meeting currently remains below 25%.

• Investors are awaiting additional data on inflation, unemployment, and wage growth in Japan to reassess those expectations.

Bitcoin remained under pressure on Thursday, trading below the $64,000 level as investors reacted to hawkish signals from the US Federal Reserve and mixed indications regarding institutional demand for the cryptocurrency.

The world's largest cryptocurrency by market capitalization continues to struggle to build momentum, as risk appetite across financial markets weakens following the Fed’s shift toward a more restrictive policy stance despite leaving interest rates unchanged.

Federal Reserve holds rates steady but adopts a hawkish tone

The US Federal Reserve left its benchmark interest rate unchanged within a range of 3.50% to 3.75% at its latest meeting, the first chaired by Kevin Warsh.

While the decision itself was widely expected, markets focused more heavily on the central bank’s updated guidance and economic projections.

The Fed removed language that had previously suggested a bias toward further monetary easing, instead signaling that interest rates could remain elevated for longer.

Policymakers also raised their year-end interest rate forecast to 3.8%, up from 3.4% projected in March.

The revised outlook prompted traders to increase bets on further monetary tightening, with markets now pricing in roughly an 85% probability of a rate hike in December.

As a result, US Treasury yields climbed and the dollar strengthened, reducing the appeal of higher-risk assets such as cryptocurrencies.

Institutional demand for Bitcoin remains mixed

Institutional demand continues to provide only limited support for a sustained Bitcoin recovery.

According to CoinGlass data, spot Bitcoin exchange-traded funds recorded net outflows of $82.2 million on Wednesday.

The uneven flow pattern, combined with a slight negative bias, suggests institutional investors remain cautious amid ongoing macroeconomic uncertainty.

If outflows continue or accelerate in coming sessions, Bitcoin could face additional downside pressure.

Technical outlook: weak rebound within a broader downtrend

Recent price action suggests Bitcoin’s rebound from oversold conditions may have been driven more by seller exhaustion than by a meaningful return of buying interest.

The cryptocurrency remains locked in a short-term bearish structure and continues to trade below several key moving averages.

Bitcoin is currently trading below:

* The 50-day exponential moving average at $70,042.

* The 100-day exponential moving average at $72,839.

* The 200-day exponential moving average at $78,174.

Failure to reclaim these levels reinforces the broader bearish trend and highlights persistent selling pressure at higher prices.

In addition, the previously broken ascending support level near $73,833 has now become a major resistance zone.

Technical indicators warrant caution

Technical indicators continue to point toward a cautious outlook.

The Relative Strength Index (RSI) on the four-hour chart remains below the 50 level, indicating that bearish momentum persists without yet reaching deeply oversold territory.

Meanwhile, the MACD histogram remains slightly positive, suggesting recent rebounds may represent corrective moves within a broader downtrend rather than the beginning of a sustained bullish phase.

Key resistance levels

If Bitcoin attempts another recovery, traders are likely to focus on several important resistance levels:

* $64,004, the first key resistance area.

* $70,042, corresponding to the 50-day exponential moving average.

A decisive break above these levels would be required to improve the technical picture and reduce the selling pressure currently dominating the market.

Oil prices fell more than 1% on Thursday, hitting their lowest levels since the first trading session after the Iran war began, as the temporary agreement between the United States and Iran to end the conflict, reopen the Strait of Hormuz, and ease sanctions on Tehran strengthened expectations of higher global crude supplies.

Brent crude futures fell $1.02, or 1.28%, to $78.53 per barrel by 10:36 GMT, while US West Texas Intermediate crude dropped $1.48, or 1.93%, to $75.31 per barrel.

Brent touched its lowest level since March 2, the first trading day after the initial US and Israeli strikes on Iran, while WTI fell to its lowest level since March 4.

“The selloff continued as energy markets kept pricing in a faster-than-expected return of Iranian oil to global markets following the latest memorandum of understanding between the United States and Iran,” said Tony Sycamore, market analyst at IG.

A 60-day negotiation period

The 14-point memorandum of understanding provides for a 60-day negotiation period, during which Iran will allow vessels to pass through the Strait of Hormuz without transit fees. The strait is one of the world’s most important routes for oil and gas shipments.

The agreement also calls for shipping activity through the strait to be restored to full capacity within 30 days.

The preliminary deal delays several of the most complex issues, most notably Iran’s nuclear program. It also requires the United States and its partners to establish a $300 billion funding plan to support the reconstruction and recovery of Iran’s economy.

Expectations of a gradual export recovery

Analysts expect oil flows through the Strait of Hormuz to recover gradually, while industry experts warned that prices may not collapse sharply as global demand improves and countries rebuild oil inventories depleted during the war.

Goldman Sachs expects Gulf exports to return to pre-war levels by the end of July, with oil production fully recovering by October.

The bank estimates that restoring exports to pre-war levels would require oil flows through the Strait of Hormuz to increase by around 13 million barrels per day from current levels, bringing traffic back to about 70% of pre-war volumes.

$75 seen as a strong price floor

BNP Paribas does not expect prices to return to pre-war levels for now, viewing the $75 per barrel level as a “strong and sustainable price floor for the foreseeable future,” due to continued supply losses and stronger global demand.

Brent crude had traded between $60 and $70 per barrel during the first two months of the year before the Iran war began.

Slower Chinese demand

In China, the world’s second-largest oil consumer, a report from PetroChina’s research unit showed that the country’s oil consumption in 2026 is expected to reach 753 million metric tons, down 4.9% from 2025.

The decline is attributed to the accelerated shift toward new energy sources and higher oil prices.

Additional geopolitical developments

Meanwhile, Ukrainian drones targeted an oil refinery in the Russian capital Moscow for the second time this week, in what Kyiv said reflected its growing military ability to carry out long-range strikes inside Russian territory.