Forex Today: Investors ignore Middle East tensions, shift focus to ECB rate decision
Here is what you need to know on Thursday, June 11:
Major currency pairs hold steady in the European session on Thursday following Wednesday's volatile action. In the second half of the day, the European Central Bank's (ECB) monetary policy decisions and producer inflation data from the United States (US) will be watched closely by market participants.
On Wednesday, the data from the US showed that annual inflation, as measured by the change in the Consumer Price Index (CPI), climbed to its highest level in three years at 4.2% in May. On a monthly basis, the core CPI, which excludes volatile food and energy prices, rose by 0.2%, at a slower pace than the 0.4% increase recorded in April and the market expectation of 0.3%. Although the US Dollar (USD) Index edged lower with the immediate reaction to May inflation data, it benefited from safe-haven flows and regained its traction in the American session. Wall Street's main indexes registered large losses on Wednesday and the USD Index closed the day with small gains above 100.00.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.28% | -0.40% | 0.11% | 0.17% | 0.33% | -0.10% | 0.36% | |
| EUR | 0.28% | -0.16% | 0.48% | 0.45% | 0.61% | 0.18% | 0.64% | |
| GBP | 0.40% | 0.16% | 0.56% | 0.61% | 0.77% | 0.33% | 0.80% | |
| JPY | -0.11% | -0.48% | -0.56% | 0.01% | 0.21% | -0.26% | 0.29% | |
| CAD | -0.17% | -0.45% | -0.61% | -0.01% | 0.24% | -0.28% | 0.19% | |
| AUD | -0.33% | -0.61% | -0.77% | -0.21% | -0.24% | -0.42% | 0.03% | |
| NZD | 0.10% | -0.18% | -0.33% | 0.26% | 0.28% | 0.42% | 0.47% | |
| CHF | -0.36% | -0.64% | -0.80% | -0.29% | -0.19% | -0.03% | -0.47% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Meanwhile, tensions in the Midde East remain high as the US and Iran continue to exchange fires. After US President Donald Trump said that Tehran is taking too long to make a deal, the US military announced that it launched attacks "against multiple targets in Iran" and described them as "self-defense." In response, Iran’s Islamic Revolutionary Guards Corps (IRGC) targeted US forces in bases in Kuwait, Bahrain, and Jordan. President Trump also said that Iranian officials asked him to halt the latest attack, per Fox News.
Crude Oil prices correct lower early Thursday. After rising more than 3% on Wednesday, the barrel of West Texas Intermediate trades near $88, losing about 2.5% on a daily basis. In the meantime, US stock index futures rise between 0.6% and 1% and the USD Index trades marginally lower on the day, slightly below 100.00.
The ECB is forecast to raise key rates by 25 basis points after the policy meeting. Revised macroeconomic projections and comments from ECB President Christine Lagarde will be scrutinized by market participants. EUR/USD holds steady at around 1.1500 in the European morning on Thursday.
The Bank of Canada (BoC) left its interest rate unchanged at 2.25%, as anticipated, on Wednesday. The policy statement and comments from BoC Governor Tiff Macklem reinforced a patient approach, noting that policymakers continue to balance lingering inflation risks against an economy that remains in excess supply. After closing virtually unchanged on Wednesday, USD/CAD edges higher and trades above 1.3950 on Thursday.
USD/JPY registered small gains on Wednesday. The pair continued to push higher and reached its strongest level near 160.60 since the Japan intervened in the foreign exchange market on April 30. The pair stays relatively quiet in the European morning and moves sideways near 160.50.
GBP/USD treads water in a narrow band below 1.3400 in the early European session on Thursday.
Gold lost more than 4% on Wednesday and extended its slide in the early Asian session. After touching its lowest level since November 2025 below $4,030, Gold manages to stage a rebound and trades in positive territory near $4,100.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
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