Forex News

Here is what you need to know on Tuesday, June 16:

The action in financial markets remains choppy in the European session on Tuesday as investors assess the latest central bank announcements, while awaiting clarity on the agreement between the United States (US) and Iran. Later in the session, ZEW Survey from Germany will be featured in the economic calendar ahead of May Housing Starts and Export and Import Price Index data from the US.

US President Donald Trump, Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf virtually signed the agreement to end the blockade of Iranian ports, reopen the Strait of Hormuz and start 60 days of nuclear negotiations, the CNN reported late Monday, citing a senior US official. The details of the agreement is yet to be released and President Trump noted that the the text will likely become public following the official signing ceremony on Friday.

After US stock index futures rallied on Monday, Wall Street's main indexes staged a bullish opening and registered strong gains. The Nasdaq Composite rose more than 3%, while the S&P 500 Index added 1.65% on the day. Early Tuesday, US stock index futures trade mixed, while the US Dollar (USD) Index, which lost 0.15% on Monday, holds steady at around 99.70.

The Reserve Bank of Australia (RBA) announced on Tuesday that it held the Official Cash Rate (OCR) at 4.35% after concluding its June monetary policy meeting. The decision aligned with the market expectations. In the post-meeting press conference, RBA Governor Michele Bullock noted that the reports of a peace deal in the Middle East are welcome news but added that they do not rule out further tightening if needed. After rising more than 0.3% on Monday, AUD/USD corrects lower and trades near 0.7050, losing about 0.2% on the day.

In the meantime, the data from China showed that Industrial Production Expanded 4.5% on a yearly basis in May, while Retail Sales contracted by 0.6% in the same period.

The Bank of Japan (BoJ) announced on Tuesday that it increased the short-term interest rate by 25 basis points (bps) to 1% after concluding the two-day monetary policy review meeting, as anticipated. One member of the board voted against this decision and the BoJ said in its policy statement that they "will continue to raise policy rate in response to developments in economic activity, prices, financial conditions." BoJ Deputy Governor Shinichi Uchida explained in the post-meeting press conference that that the risk of significant economic slowdown appears to have decreased compared with a while ago. USD/JPY stays relatively quiet and moves sideways above 160.00 in the European session on Tuesday.

EUR/USD stays in a consolidation phase below 1.1600 after posting marginal gains on Monday.

GBP/USD climbed to a fresh 10-day high above 1.3450 on Monday but erased its daily gains to close virtually unchanged. The pair edges slightly lower in the European morning on Tuesday and trades at around 1.3400.

Gold benefited from improving risk mood and rose more than 2% on Monday. XAU/USD clings to small gains above $4,300 but struggles to gather bullish momentum on Tuesday.

Bank of Japan (BoJ) Deputy Governor Shinichi Uchida is addressing the press conference, explaining the reason behind raising the key interest rate by 25 basis points (bps) to 1.0% as expected. 

Deputy Governor, one of the key architects of BoJ policy for more than a decade, will stand in for Governor Kazuo Ueda who was hospitalized last week for treatment of a liver cyst infection.

BoJ press conference key highlights

Japan economy has recovered moderately, although some weaknesses have been seen in part.

Risk of significant economic slowdown appears to have decreased compared with a while ago.

Japan's economy has been developing generally in line with BoJ's baseline scenario.

There is risk of underlying inflation deviating upward to level above price target.

Financial conditions have been accommodative.

Real interest rates have been negative mainly in short-, medium-term zone.

Will continue to raise policy rate in response to developments in economic activity, prices, financial conditions.

Will examine likelihood of realising baseline scenario as well as risks, in considering timing and pace of policy adjustment.

Will continue to look at impact of Middle East situation, when asked about pace of future rate hikes.

Wage-price mechanism has taken root.

Wage-price mechanism has aligned with 2% price target in recent years.

Neutral rates estimates are too diverse to be useful for monetary policy. 

Governor Ueda's hospitalisation is short-term, don't see impact on monetary policy conduct.

Will need to carefully assess whether Middle East peace talks affect economy more or prices.

The section below was published on June 16 at 3:45 GMT to cover the Bank of Japan's monetary policy announcements and the initial market reaction.

The Bank of Japan (BoJ) announced on Tuesday that it increased the short-term interest rate by 25 basis points (bps) to 1% after concluding the two-day monetary policy review meeting.

The decision came in line with the market expectations.

Summary of the BoJ’s Monetary Policy Statement

BoJ makes rate decision by 7-1 vote.

Board member Asada dissented to rate decision.

Will continue to raise policy rate in response to developments in economic activity, prices, financial conditions.

Will examine likelihood of realising baseline scenario as well as risks, in considering timing and pace of policy adjustment.

Accommodative financial conditions are expected to be maintained after change in policy rate, continuing to firmly support economic activity.

Japan's economy has recovered moderately, although some weaknesses have been seen in part.

Risk of significant economic slowdown appears to have decreased compared with a while ago.

Japan's economy has been developing generally in line with BoJ’s baseline scenario.

Pass-through of rising oil prices has been progressing at relatively faster pace, which could spread to increase in consumer prices across wide range of items.

There is risk of underlying CPI inflation deviating upward to level above price target.

Japan's financial conditions have been accommodative.

Real interest rates have been negative mainly in short-, medium-term zone.

Japan's economic growth is likely to decelerate, but is expected to continue growing moderately.

Year-on-year increase in CPI likely to accelerate to a level clearly above 2%.

Mechanism in which wages and prices rise moderately in tandem will be maintained.

Underlying CPI inflation expected to increase gradually, reach level consistent with the price target between the 2nd half of fiscal 2026 and fiscal 2027.

For the time being, need to pay particular attention to impact of future course of middle east situation on financial, FX markets, economy and prices.

Must pay attention to the effects of global AI-related demand, future FX moves on Japan's economy, prices.

Will conduct monetary policy as appropriate from the perspective of sustainably and stably achieving 2% inflation target.

To pause bond taper from April 2027, keep the monthly pace of JGB buying at around 2 trln yen.

No change in current plan to reduce monthly JGB buying by 200 bln yen each quarter until January-March 2027.

Decision on bond tapering approved by 7-1 vote.

Will discontinue practice of conducting interim assessment of bond taper plan.

Will respond nimbly, such as by increasing JGB buying and conducting fixed-rate purchase operations, in case of rapid rise in long-term rates.

Market reaction to the BoJ policy announcements

USD/JPY maintains the offered tone around 160.15 following the Bank of Japan's (BoJ) monetary policy announcement, down 0.07% on the day. 

This section below was published on June 15 at 23:00 GMT as a preview of the Bank of Japan Interest Rate Decision.

• The Bank of Japan is expected to hike interest rates to 1% in its June meeting.
• Governor Kazuo Ueda will not precede the meeting due to health issues.
• USD/JPY retains its bullish bias despite easing demand for the US Dollar.

The Bank of Japan (BoJ) will announce its monetary policy decision on Tuesday, at around 3:00 GMT.

The BoJ is widely expected to deliver a hawkish move by hiking the benchmark interest rate by 25 basis points (bps) to 1%, its highest level since 1995. The hike is meant not only to address mounting inflationary pressures but also the Japanese Yen’s (JPY) strength.

Governor Kazuo Ueda, who was hospitalized last week, won’t attend the monetary policy meeting. Deputy Governor Ryozo Himino would chair the policy meeting, while Deputy Shinichi Uchida would hold the press conference following the decision.

Ahead of the announcement, the USD/JPY pair trades above the 160.00 mark, a line in the sand for Japanese authorities, as it is usually seen as an intervention level.

Finally, the Middle East crisis has reached an inflection point: The United States (US) and Iran reached an agreement that will reopen the Strait of Hormuz and extend the ceasefire for another 60 days, allowing talks to continue. Financial markets are optimistic ahead of the announcement, resulting in mild US Dollar (USD) weakness across the FX board.

What to expect from the BoJ interest rate decision?

An interest rate hike has long been priced in, meaning the rate move itself should have a limited impact on the JPY. Japanese policymakers, however, will also discuss the BoJ’s plan to reduce purchases of Japanese Government Bonds (JGBs) to allow long-term rates to be guided more by the market. Their decision on the matter could define the JPY’s near-term direction.

Japan’s annual inflation, as measured by the Consumer Price Index (CPI), stood at 1.4% in April this year, easing from 1.5% in March. However, wholesale inflation jumped to 6.3% You in May, a clear sign that inflationary pressures are likely to extend in time, despite a potential end to the Iran war later this week.

But it is not only about higher Oil prices: the significant depreciation of the JPY also results in inflation stemming from pretty much all imported goods and raw materials. And the BoJ's mandate is clearly focused on the matter: “The Bank of Japan, as the central bank of Japan, decides and implements monetary policy with the aim of maintaining price stability,” targeting 2% annual inflation.

That being said, the current CPI at 1.5% YoY may not be enough to justify a rate hike, but wholesale prices and JPY weakness are.

BoJ Governor Ueda said before being hospitalized that policymakers should not look at Oil prices in isolation, noting that temporary energy shocks can become persistent and affect wages, expectations, and price-setting behavior.

"If inflation expectations are already high and wages are accelerating, the risk of second-round effects is large," Ueda stated, adding that the boundary between temporary and persistent inflation is not mechanical

How could the Bank of Japan's monetary policy decision affect USD/JPY?

As previously noted, market participants have already priced in a 25 bps rate hike. Any decision on future bond purchases is partially discounted. Japanese policymakers don’t tend to surprise investors and tend to act too cautiously. With that in mind, and given that the press conference will be led by Deputy Shinichi Uchida, the BoJ’s announcement is likely to have a limited impact on JPY.

Valeria Bednarik, Chief Analyst at FXStreet, notes: “The USD/JPY pair trades around the 160.00 mark, maintaining the positive bias despite easing market concerns undermining demand for the USD. The daily chart for the pair shows a bullish 20-day Simple Moving Average (SMA) that heads north, well above the 100- and 200-day SMAs. The same chart shows that technical indicators have lost their upward momentum but remain above their midlines, lacking directional strength. The mentioned 20-day SMA has attracted buyers and now provides near-term support at around 159.65”

Bednarik adds: “Once below the aforementioned dynamic support, the pair can extend its slide towards 159.00, while additional selling pressure could see the pair aiming for 158.60, a static support level. The USD/JPY pair peaked at 160.73 in April, a multi-decade high and a critical level to watch should JPY continue to weaken. Next comes 161.00, although it seems unlikely that Japanese authorities will allow the currency to weaken that much without actually intervening in the market.”

Rabobank’s Global Daily notes that the EU has formally launched accession talks with Ukraine and Moldova while simultaneously hardening its stance toward China. With EU officials accusing China of training Russian troops and considering sanctions and tariffs, the bank argues that an EU shift closer to the US China policy could have significant implications for EUR/USD via trade and growth channels.

EU accession and China trade stance

"The EU officially launched a Ukraine and Moldova accession process, as Moscow once again escalates its attacks on Kyiv."

"Obviously, this process could run for years, but like Hormuz, it is a development of vast geostrategic significance."

"That’s as the EU’s Kallas claimed China trained Russian troops and the Union is weighing sanctions and tariffs."

"Four days ago, The Economist argued, ‘A trade war between the EU and China seems inevitable’: some said the same four years ago."

"While the EU perhaps following the US stance towards China might not be as market-moving as the original (and sustained) US effort, it is hugely significant for the physical economy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• WTI price slumps to near $79.20 in Tuesday’s early European session. 
• Trump announced a memorandum of understanding had been signed to bring an end to the US-Israel conflict with Iran.
• The API weekly crude oil report will be published later on Tuesday.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $79.20 during the early European trading hours on Tuesday. The WTI price falls to a three-month low after the United States (US) and Iran have agreed on a framework deal to end the war. 

US President Donald Trump and Vice President JD Vance signed an electronic copy of a memorandum of understanding with Iran. Trump noted that the Strait of Hormuz “is already partially opened,” and “it’ll be completely opened” on Friday. Hopes of a US-Iran peace deal ease concerns about oil supply disruption, weighing on the WTI price. 

The Strait of Hormuz had been effectively closed since shortly after the US and Israel launched airstrikes on Iran on February 28. A crucial waterway normally handles around one-fifth of global oil shipments and resulted in the shutdown of roughly 14 million barrels per day (bpd) of oil production.

However, uncertainty lingered as both sides offered differing accounts on key issues. Iranian President Masoud Pezeshkian called the US-Iran pact an "important step" toward stopping the fighting but cautioned that a final agreement for a lasting truce "has yet to take shape."

Traders brace for the American Petroleum Institute (API) weekly crude oil report, which is due later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might undermine the WTI price.

BNY strategists John Velis and David Tam preview the upcoming FOMC meeting under new Chair Kevin Warsh, expecting slightly hawkish changes to the statement and dot plot. They see the Federal Reserve signaling two-way risks to rates and dropping the projected 2026 cut, while not forecasting any rate cuts or hikes this year despite an improved outlook after the ceasefire.

New Fed Chair and hawkish tweaks

"We expect slightly hawkish changes to the statement and dots on Wednesday."

"The outlook improves on ceasefire, but we don’t expect rate cuts, or hikes, this year."

"Incoming Fed Chair Kevin Warsh presides over his first FOMC meeting this week, with the U.S.-Iran MOU adding a new consideration alongside the immediate monetary policy decision."

"We expect the FOMC statement to signal a clear two-way risk to rates, with the median dot likely dropping the single cut projected for end-2026."

"Warsh has been critical of forward guidance and may use the press conference — or limit it — to signal how much communication policy will change under his tenure."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Japan Finance Minister (FM) Satsuki Katayama said during the European trading session on Tuesday that the government is focused on appropriately conducting economic and fiscal policies.

Additional remarks

Won't comment on BoJ decision until after BoJ deputy governor speaks.

Believe status of accessing mythos remains as previously promised but checking on actual operations.

Market reaction

No major action seen in the Japanese Yen (JPY) following Japan's Katayama comments. As of writing, USD/JPY trades slightly lower to near 160.25.

• Gold struggles to rally beyond $4,300 after rallying about 6.5% in the last three trading days.
• Enthusiasm about the US-Iran peace has turned to caution, with markets awaiting details of the deal.
• XAU/USD bulls are likely to face significant resistance around $4,400.

Gold (XAU/USD) maintains a mildly positive tone on Tuesday, holding gains after rallying about 6.5% over the last few days. The precious metal's recovery, however, has lost steam after crossing the $4,300 line and remains practically flat as the initial enthusiasm about the US-Iran peace deal faded, with investors awaiting details of the agreement and monetary policy decisions by major central banks.

US President Donald Trump said that the deal has already been signed and that the details might be released before Friday. Investors, meanwhile, await more clarity on factors such as traffic through the Strait of Hormuz, which has sent global inflation soaring over the last three months, and Iran’s nuclear program, as the possibility of a re-escalation of the conflict has not been completely ruled out.

Apart from that, traders are also awaiting monetary policy decisions by some of the world’s major central banks, including the US Federal Reserve (Fed). The market will be eager to assess whether the peace deal has prompted policymakers to set aside plans for monetary tightening.

Technical Analysis: Gold's broader trend remains bearish

XAU/USD trades at $4,315, extending a corrective phase below a dense band of nearby resistances. Momentum indicators in the daily chart are picking up but not yet at bullish levels. The Relative Strength Index (RSI) is hovering around 43, and the Moving Average Convergence Divergence (MACD) holds in negative territory, suggesting downside pressure is still dominant despite the recent stabilization.

Gold bulls are likely to be tested around $4,400. A previous support area near $4,380 (May 27,28 lows) is likely to act now as resistance ahead of the descending trendline from January's peak, now around $4,430, and the key 200-day SMA, around $4,465. Further up, the target is the late-May highs, at the $4.590 area.

On the downside, Monday's low at the $4,260 area might provide support ahead of last week's low of $4,023. A bearish reaction below that level brings the late October 2025 level, at $3,888, into play.

(The technical analysis of this story was written with the help of an AI tool.)

Reserve Bank of Australia (RBA) Governor Michele Bullock is speaking at the press conference, explaining the reasons behind leaving the benchmark interest rate unchanged at 4.35% after the June monetary policy meeting.

Bullock is responding to media questions as part of a new reporting format for the central bank that began last year.

Key quotes from the RBA Press Conference 

Inflation remains too high.

Flow of data consistent with our expectations.

Reports of a peace deal in the Middle East are welcome news.

Does not rule out further tightening if needed.

Too early to say if the cooling housing market will help on policy.

We are not forecasting an economic contraction this quarter.

Demand needs to slow to get inflation down.

Need low and stable inflation for the economy to grow at the trend.

Did not consider raising rates.

Board still concerned about inflation, but in a better position.

Still risks on upside for inflation.

Monthly data are volatile, need to wait for more figures.

Can't rule out that we might have to do more on rates.

Current oil prices are in line with our baseline forecasts.

Still think labor market little bit tight at 4.5% Unemployment Rate.

This section below was published at 04:30 GMT to cover the Reserve Bank of Australia's monetary policy announcements and the initial market reaction.

The Reserve Bank of Australia (RBA) announced on Tuesday that it held the Official Cash Rate (OCR) at 4.35% after concluding its June monetary policy meeting. The decision aligned with the market expectations.

This is the first pause following three consecutive 25 basis points (bps) rate hikes earlier this year.

Summary of the RBA Monetary Policy Statement

Today's decision was unanimous.

The latest data show that headline and underlying inflation are still too high.

The board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions.

Short-term measures of inflation expectations have eased but remain higher than earlier in the year.

It will do what it considers necessary to achieve that outcome, including increasing the cash rate target further if required.

There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation.

Financial conditions have tightened this year in response to three increases in the cash rate target.

Inflation is likely to remain high for some time.

The board remains focused on ensuring that inflation does not become embedded once the impulse from higher oil prices has passed through.

Global oil supply issues will take some time to resolve, maintaining upward pressure on global energy prices and inflation.

AUD/USD reaction to the RBA interest rate decision

The Australian Dollar holds losses in an immediate reaction to the RBA’s decision. At the time of writing, the AUD/USD pair is down 0.27% on the day at 0.7155.

This section below was published on June 16 at 22:45 GMT as a preview of the Reserve Bank of Australia's monetary policy announcements.

• The Reserve Bank of Australia is expected to hold the interest rate steady at 4.35% in June.
• RBA Governor Bullock’s words to be dissected for fresh cues on the monetary policy outlook.
• The Australian Dollar is primed for intense volatility on the RBA policy announcement.

The Reserve Bank of Australia (RBA) is widely expected to leave the Official Cash Rate unchanged at 4.35% when it announces its monetary policy decision on Tuesday, marking a pause after three consecutive rate hikes delivered earlier this year.

The decision will be announced at 04:30 GMT, accompanied by the Monetary Policy Statement (MPS). RBA Governor Michele Bullock’s press conference will follow at 05:30 GMT.

The RBA policy announcement and Bullock’s presser could trigger a big reaction in the Australian Dollar (AUD), as markets eagerly await signals on the bank’s path forward on interest rates.

RBA pauses, end of the tightening cycle?

While inflation remains stubbornly elevated and continues to pressure households, a growing number of signals suggest the Australian economy may be losing momentum. Higher borrowing costs have started to weigh on consumer demand and early signs of labour market cooling are emerging.

Data from the Australian Bureau ​of Statistics (ABS) showed that Gross Domestic Product (GDP) grew 0.3% quarter-over-quarter (QoQ) in the first three months of the year, compared with a forecast of 0.5% and decelerating from 0.9% in the prior quarter. Annual ​growth steadied at 2.5% in the same period, below the 2.7% expected.

Meanwhile, the country’s Unemployment Rate jumped to 4.5% in April, the highest since September. The monthly Consumer Price Index (CPI) inflation slowed to 0.4% in April from 1.1% in March, while the annual pace also declined to 4.2% from 4.6%.

The central bank, therefore, finds itself balancing inflation that remains above target and an economy that appears to be slowing down.

“Markets now imply just a 22% probability of an August RBA hike, down from 80% a month ago, and just 11 bps of tightening this year as higher interest rates have started to slow economic activity,” per Reuters.

The shift in sentiment accelerated after National Australia Bank (NAB) ditched its peers by suggesting the RBA's next move could eventually be a rate cut rather than another hike.

Three of the four major banks, NAB, Commonwealth Bank of Australia (CBA), and Australia and New Zealand Banking Group (ANZ), expect the RBA to leave the cash rate at 4.35% for the remainder of 2026.

For now, policymakers are likely to maintain a cautious tone, acknowledging persistent inflation pressures while emphasizing increased uncertainty surrounding growth, employment and household spending.

The main focus will be on whether the reopening of the Strait of Hormuz is enough to calm the central bank’s inflation concerns and to signal a pause in the current tightening cycle.

"It'll be about the little clues as to whether the cycle is over or it's still alive - that's going to be really important for both the Aussie and the kiwi markets," said Imre Speizer, a strategist at Westpac.

How will the Reserve Bank of Australia’s decision impact AUD/USD?

The AUD has rebounded firmly against the US Dollar (USD) in the countdown to the RBA event risk.

The key market takeaway will therefore be any change in the RBA's forward guidance. A statement retaining a tightening bias could revive expectations for an August rate increase and support the Aussie Dollar.

Conversely, any indication that the central bank is becoming more concerned about growth risks could reinforce market pricing for a prolonged pause and weigh down on the AUD.

Dhwani Mehta, Asian Session Lead Analyst at FXStreet, highlights key technical levels for trading AUD/USD following the policy announcement.

“The pair is challenging the key 100-day Simple Moving Average (SMA) on the road to recovery. The 14-day Relative Strength Index (RSI) has bounced off the oversold territory, but remains in the bearish zone, suggesting that sellers are likely to retain control.”

“On the topside, initial resistance emerges at the 100-day SMA near 0.7084, followed by the 21-day SMA around 0.7116 and the 50-day SMA close to 0.7143, levels that would need to be reclaimed to ease the current downside pressure. On the downside, the 200-day SMA at roughly 0.6844 offers the next major support, with a sustained break below that long-term average likely opening the door to a deeper retracement,” Dhwani adds.

• EUR/USD ticks lower to near 1.1580 as the US Dollar gains ahead of the Fed’s policy decision.
• The Fed is expected to leave interest rates unchanged for the fourth meeting in a row.
• ECB’s Kazaks highlights the need to act again, while warning of upside inflation risks.

The EUR/USD pair trades marginally lower at around 1.1580 during the European trading session on Tuesday. The major currency pair drops as the US Dollar (USD) rises, with investors awaiting the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% higher to near 99.75.

The impact of the Fed’s policy announcement will be significant on the US Dollar, as it will be the first one under new Chairman Kevin Warsh. Fed Chair Warsh will likely maintain a neutral approach on the monetary policy outlook, at times when inflationary pressures have accelerated due to elevated energy prices.

According to the CME FedWatch tool, the Fed is expected to leave interest rates unchanged in the 3.50%-3.75% range for the fourth meeting in a row.

Meanwhile, the Euro (EUR) trades higher among its risky peers amid expectations that the European Central Bank (ECB) could tighten monetary conditions further.

ECB Governing Council member Martins Kazaks said on Monday that the central bank “needs to act again, if needed,” while predicting upside inflation risks to persist.

EUR/USD technical analysis

EUR/USD trades lower at around 1.1580, holding a modest bearish bias as it sits just under the 20-period Exponential Moving Average (EMA) at 1.1599 and beneath the descending resistance trend line that comes in from 1.1849.

The price remains above the prior upward support trend line anchored at 1.1409, but the Relative Strength Index (RSI) at around 44 stays below the midline, hinting that recovery attempts are fragile while sellers retain the upper hand.

On the topside, immediate resistance is located at the 20-period EMA near 1.1600, with further hurdles at the downtrend’s break price around 1.1687 and then the 1.1849 origin of the descending line. On the downside, initial support is seen near the former uptrend break area at 1.1506, with a deeper floor at the 1.1409 trend-line start, where a decisive break would reinforce the broader bearish tone.

(The technical analysis of this story was written with the help of an AI tool.)

• NZD/USD weakens as broad caution and a steady US Dollar kept investors defensive ahead of updates on Iran’s nuclear program.
• Fed is widely expected to keep interest rates unchanged at 3.50% to 3.75% in June.
• China’s Retail Sales fell 0.6% year-on-year in May, missing expectations of a flat reading.

NZD/USD extends its losses for the third consecutive day, trading around 0.5810 during the Asian hours on Tuesday. The pair depreciates as the US Dollar (USD) holds steady amid broad market caution. Investors remain on the defensive as they await further updates regarding Iran’s unresolved nuclear program.

Both Washington and Tehran have not released the official text of the agreement; major shipping lines are delaying vessel rerouting through the strategic waterway until full transparency is established.

Even though US President Donald Trump announced that a memorandum of understanding (MoU) has been signed to end the conflict and reopen the blockaded Strait of Hormuz, market participants remain deeply cautious. According to Iran's semi-official Mehr news agency, the current draft calls for the strait to reopen within 30 days under Iranian arrangements.

The Federal Reserve (Fed) is widely expected to keep its benchmark interest rate unchanged at a target range of 3.50% to 3.75% on Wednesday, which could be attributed to the higher US inflation due to elevated energy prices linked to Middle East tensions. Traders will be closely monitoring the press conference for cues on how new Fed Chair Kevin Warsh intends to lead the central bank into its next era.

The New Zealand Dollar (NZD) struggles following a wave of weak economic data out of China. Because China is New Zealand's largest trading partner, buying roughly one-third of all Kiwi goods exports, the New Zealand Dollar acts as a primary liquid proxy for the Chinese economy.

China's domestic demand slumped sharply in May, with Retail Sales contracting by 0.6% year-on-year against expectations of a flat reading. Additionally, Fixed Asset Investment dropped at a faster pace of -4.1%, failing to meet the projected -2%. While Industrial Production offered a minor bright spot by coming in stronger-than-expected at 4.5%.