Nevertheless, the dollar is still on track for its biggest monthly gain since July 2025. Meanwhile, the British pound has shown surprising stability despite the turmoil in the country's political arena.
The US dollar index, a measure of the greenback's strength against a basket of major currencies, fell 0.19% to 101.32.
The decline in the USD is primarily due to US inflation meeting expert expectations, coupled with a sharp drop in energy prices. This has led the market to narrow its forecasts regarding the extent of monetary tightening by the Federal Reserve (Fed). According to data from LSEG, investors now predict the Fed will only raise interest rates by about 0.25 percentage points this year.
In the energy market, crude oil prices recorded a nearly 10% drop last week as a number of oil tankers resumed transit through the Strait of Hormuz.
Regarding macroeconomic data, the University of Michigan announced that the Consumer Confidence Index for June 2026 was 49.5 points, an increase from 44.8 points in May 2026, but still lower than the forecast of 50.0 points due to continued inflation concerns among the public.
Previously, the US dollar had experienced a strong upward trend thanks to the hawkish monetary policy stance of the new Fed Chairman, Kevin Warsh. By the end of the week, other senior officials such as Minneapolis Fed President Neel Kashkari and New York Fed President John Williams also reaffirmed that US inflation remains too high, thus pushing back the time when the world's largest economy can bring inflation down to its 2% target.
In Asia, the US dollar edged down 0.02% against the Japanese yen to 161.74 yen/USD. A break below 161.96 yen/USD would see the Japanese currency fall to its weakest level since 1986. Despite this, the greenback still gained 0.29% for the week, marking its second consecutive week of gains.
Japan's core inflation report showing an increase in June 2026 is providing further support for the domestic currency. However, Wells Fargo recommends that investors prioritize short-selling the USD against the yen ahead of next week's US jobs report. Experts emphasize the risk that the Japanese government could take advantage of weak US employment data to intervene aggressively in the foreign exchange market.
In Europe, the British pound maintained its upward momentum despite Prime Minister Keir Starmer's recent resignation, marking the arrival of Britain's seventh prime minister in just 10 years. At the close of trading, the pound rose approximately 0.2% against the US dollar, trading around $1.3219 per pound. The currency also ended its best trading week against the euro in five weeks, gaining around 0.5% and fluctuating at 86.26 pence per euro. Simultaneously, the euro/USD exchange rate rose 0.18% to $1.1389 per euro.
The currency market currently assesses that the transition of power in the UK will proceed fairly smoothly. The only candidate to announce his candidacy to replace Mr. Starmer, MP Andy Burnham, has sent reassuring signals that the new government will respect the UK's strict fiscal rules.
Nick Kennedy, a currency strategist at Lloyds Bank, believes the market is now accustomed to and ready for a change of Prime Minister in the UK. The British pound is in a good position thanks to positive expectations for the new policies.
Source: https://baotintuc.vn/thi-truong-tien-te/dong-usd-giam-phien-thu-hai-lien-tiep-20260627095705930.htm
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