The US Dollar strengthened against the Canadian Dollar and other assets following a hawkish Federal Reserve hold and renewed bets on rate hikes, despite recent progress on a US-Iran deal. According to FX Street, the USD/CAD pair traded near 1.4105 during early European trading hours on Thursday, June 18.
FX Street also reported that Kevin Warsh’s hawkish debut as Fed Chair and a more aggressive dot plot pushed markets to fully price in a Federal Reserve rate hike by October. This repricing of Fed policy led to a surge in 2-year Treasury yields, which in turn pressured gold prices and risk assets. Deutsche Bank, via FX Street, noted that gold and Bitcoin both declined as investors reacted to the FOMC statement and hawkish tone.
For Japanese investors, the US Dollar’s strength and rising Treasury yields highlight ongoing global monetary tightening risks, which could influence currency and equity markets in Asia amid shifting yield differentials.