Full Global Forex Daily Market News Report – June 26, 2026
Release time：2026-06-26
Publisher：GINZO
I. Global Forex Market Overview: US Dollar Stages Brief Pullback, Strong Long-Term Trend Remains Intact
As of the Asian midday close on June 26, the US Dollar Index (DXY) stood at 101.44, edging down 0.16% intraday to halt its six-consecutive-day rally. The short-term downward pressure stemmed from two major drivers: First, easing geopolitical tensions in the Middle East fuelled expectations of de-escalation, prompting market participants to unwind safe-haven USD holdings on a temporary basis. Second, US Treasury yields across the curve edged lower overnight, with the 2-year yield falling 2 basis points to 4.13% while the 10-year yield held steady at 4.39%. The marginal compression of yield spreads curbed further upside momentum for USD bulls.
Nevertheless, major global investment banks unanimously stressed that the current USD pullback is merely a technical correction, with medium-to-long-term bullish fundamentals still firmly in place. The hawkish anti-inflation stance delivered by the Federal Reserve at its June policy meeting, consistently stronger US economic data relative to the Eurozone, UK, Japan and other major economies, plus ongoing easing cycles across other central banks worldwide, collectively sustain the widening interest rate differential between the US and its peers, underpinning the appeal of USD-denominated assets.
CME FedWatch interest rate futures pricing indicated markets are pricing in two 25-basis-point rate hikes by the Fed in 2026 – one in September and another in December – totalling 50 basis points of tightening for the year, which would lift the terminal federal funds rate to 4.1%. The probability of this outcome climbed to 76%, surging 32 percentage points from two weeks prior, locking in medium-term upside for the US dollar.
From a capital flow perspective, large bullish USD positions persist across global forex options markets. JPMorgan, Bank of America and Goldman Sachs all raised their quarterly DXY targets in latest strategy notes. Institutions widely view the 102 level as the primary near-term upside target. Should next week’s US Core PCE inflation print come in hotter than expected, the US dollar is poised to resume a fresh rally.
Emerging market currencies showed divergent performance. The Mexican Peso and Brazilian Real rebounded modestly amid softer USD sentiment, while the South Korean Won and New Taiwan Dollar saw muted gains weighed down by weak local export data, highlighting their high volatility profile.
II. In-Depth Analysis of the Federal Reserve’s Core Policy: New Chair Walsh’s Hawkish Rhetoric Reshapes Global FX Pricing
The June 17 FOMC meeting concluded with the Fed holding its benchmark interest rate steady in the 3.50%-3.75% range, marking the fourth consecutive pause since the conclusion of the 2025 December easing cycle. All 12 committee members voted unanimously – the first unanimous decision in nine months. The most transformative shift of the meeting lay in a full overhaul of the policy statement, which was cut by 62% in length and stripped of all dovish, rate-cut-forward-guidance language carried over from the Powell era. The document retains only one core line: “The Committee will strive to achieve price stability”, signalling an exclusive focus on taming inflation.
New Fed Chair Walsh presided over her first post-meeting press conference, striking an unwaveringly hawkish tone and explicitly ruling out market expectations of rate cuts within 2026. She also unveiled signals of a structural overhaul to the Fed’s policy framework: the central bank will gradually de-emphasize dot plot forward guidance, abandoning explicit pre-set interest rate paths for markets and adjusting monetary policy dynamically in real time based solely on inflation and employment data. This significantly limits scope for markets to pre-emptively price in easing cycles.
The meeting’s dot plot saw substantial upward revisions to rate projections: nine committee members foresee rate hikes before the end of 2026, six of whom expect two total hikes, while only one member pencilled in cuts. The median dot plot projection shifted from steady rates to a 25-basis-point hike by year-end, lifting long-term USD premium expectations across markets.
Deutsche Bank released a landmark report updating its inflation and monetary policy outlooks, sharply upgrading US inflation forecasts: core PCE inflation is projected to hit 3.2% by end-2026 and 2.5% in 2027. The report argued US inflation stickiness is broad-based, with energy prices and tariffs only transient headwinds, while persistently elevated labour wage growth constitutes the core driver of sustained high inflation. The bank therefore retains its call for two rate hikes this year. Goldman Sachs concurrently revised its forex strategy, slashing full-year target levels for the Euro, British Pound and Japanese Yen, reiterating its bullish view on the USD’s yield premium over non-US currencies.
The Fed’s hawkish policy pivot completely rewrote the dominant forex trading narrative that prevailed through the first half of the year. The prevailing “de-dollarization, short USD” trades unwound en masse. The US Dollar Index climbed 2.1% in June, marking its strongest monthly performance in nearly a year. Cross-border global capital has flowed back into US Treasury bonds and USD-denominated equities, leaving most non-US currencies trapped in weak sideways ranges.
III. Renminbi Exchange Rate Full Market Performance, Domestic Policies & Official Mid-Prices (Released June 26)
1. Official Central Parity Rates
On June 26, the China Foreign Exchange Trade System (CFETS), authorised by the People’s Bank of China (PBOC), set the USD/CNY central parity rate at 6.8166, an upward adjustment of 43 basis points, ending two consecutive days of mild depreciation adjustments. The move reflects official intentions to stabilise the RMB and offset US dollar strength via regulatory guidance.
Full parity rate changes for all major foreign currencies against the RMB:
- EUR/CNY: 7.7405, +56 bps
- 100 JPY/CNY: 4.2107, -17 bps
- GBP/CNY: 8.9832, sharp upward adjustment of 150 bps
- AUD/CNY: 4.7021, +29 bps
- CHF/CNY: 8.4046, +172 bps – the largest gain among all currencies for the session
- CAD/CNY: 4.7954, +101 bps
- NZD/CNY: 3.8435, -15 bps
- HKD/CNY: 0.86942, -7 bps
2. Onshore & Offshore RMB Spot Performance
As of the close on June 25, onshore USD/CNY settled at 6.7995, rising 57 basis points on the day; offshore USD/CNY closed at 6.8005, up 127 basis points, with offshore appreciation far outpacing the onshore market amid modest short-term inflows into RMB assets from overseas investors.
The CFETS RMB Exchange Rate Index, last updated to June 18, stood at 101.77, up 0.28% month-on-month. The broad BIS RMB currency basket index registered 109.48, gaining 0.18%. The RMB maintained resilience against a basket of currencies, rather than passively moving in lockstep with US dollar swings.
3. Domestic Money Market Liquidity Backdrop
Short-term interbank funding rates across China edged lower: overnight Shibor printed at 1.3990%, down 0.9 bps; 7-day Shibor fell 3.5 bps to 1.5130%; the weighted average DR007 stood at 1.5098, indicating reasonably ample systemic liquidity.
On June 25, the PBOC rolled out a CNY 500 billion Medium-Term Lending Facility (MLF) operation, holding the MLF policy rate unchanged. China’s monetary policy remains moderately accommodative, creating a stark policy divergence with the Fed’s tightening cycle – a primary source of short-term RMB exchange rate volatility.
Forex traders noted that the long-term interest rate gap between loose domestic monetary conditions and tight US policy will continue to cap RMB upside, yet the PBOC has a full suite of regulatory tools including central parity guidance and cross-border capital flow adjustment instruments to counter depreciation pressures. There is no fundamental basis for sharp unilateral RMB depreciation, with the currency expected to trade sideways within the 6.78–6.85 range in the near term.
IV. European Currencies: Euro & Pound Stage Weak Rebounds, Medium-Term Downward Trend Intact
EUR/USD
The Euro edged up to 1.0802 intraday, a 0.12% gain, recouping losses from the prior two sessions, yet lacks solid fundamental support. Eurozone May industrial output rose a mere 0.1% month-on-month, well below the 0.3% market consensus, with manufacturing sectors stuck in contraction territory. Core German factory orders recorded an eighth consecutive year-on-year decline.
The European Central Bank maintains a dovish policy stance, with multiple Governing Council members publicly stating rate hikes are off the table for 2026, creating a massive yield spread gap with the Fed’s tightening path. Institutions peg the near-term rebound ceiling for EUR/USD at 1.0880, with medium-term downside risks targeting the 1.06 level as US yield premiums persistently cap Euro upside.
GBP/USD
The British Pound emerged as the best-performing major non-US currency of the session, with the GBP/CNY central parity lifted by 150 basis points, and GBP/USD edging up to 1.2640. Markets are pricing growing divisions within the Bank of England over inflation policy: UK May core inflation rebounded modestly, prompting some policymakers to advocate keeping rates higher for longer and offering short-term sterling support.
However, anaemic UK economic growth, persistent weakness in consumption data and a slumping housing market rule out sustained BoE tightening. The current bounce is solely an oversold correction, with medium-term bearish pressures intact. Traders are awaiting next week’s US PCE inflation print; a hotter-than-expected reading will trigger renewed sterling declines.
V. Japanese Yen, Aussie & Loonie Commodity Currency Analysis
USD/JPY
The Yen remained entrenched in weakness, with the 100 JPY/CNY central parity down 17 basis points and USD/JPY stabilising around 158.20 in elevated sideways trade. The Bank of Japan retains its ultra-loose monetary policy framework with no signals of adjustments to negative interest rates or Yield Curve Control (YCC). The spread between US and Japanese 10-year Treasury yields remains above 200 basis points, a massive differential that continues to weigh heavily on the Yen.
Japan’s Ministry of Finance has ramped up verbal intervention rhetoric, yet tangible market intervention has been limited, only delivering fleeting minor pullbacks that fail to reverse the Yen’s long-term depreciation trend.
Australian Dollar & Canadian Dollar (Commodity Currencies)
The AUD/CNY central parity rose 29 basis points, with AUD/USD ticking up to 0.6570 on mild recovery across industrial metals including iron ore and copper from multi-month lows. The Canadian Dollar outperformed its commodity peers: CAD/CNY rose 101 basis points and USD/CAD dipped to 1.3710. A modest rebound in Canadian inflation has led markets to price a slower pace of rate cuts by the Bank of Canada, alongside stabilising crude oil prices, creating dual tailwinds for the Loonie.
Even so, all commodity currencies remain capped by the US dollar’s underlying strength, limiting rebound scope. Weak global commodity demand caps long-term upside potential for the complex.
VI. Geopolitics & Commodity-FX Transmission Channels
Diplomatic talks between the US and Iran in the Middle East yielded incremental progress, lifting expectations of restored shipping security through the Strait of Hormuz. Crude oil prices drifted lower, easing marginal upside risks to global inflation and removing a key pillar of USD safe-haven buying – the primary catalyst behind the US dollar’s short-term pullback today.
Easing geopolitical risks lifted broad risk sentiment, supporting modest rebounds across global equities and risk-sensitive currencies. Gold gained 0.6% intraday on softer USD sentiment, reclaiming the USD 4,000 per ounce mark. Nonetheless, Goldman Sachs and Deutsche Bank retain bearish outlooks for bullion, arguing Fed rate hike expectations will keep precious metals under pressure, with downside risk targeting USD 3,800 per ounce.
On capital flows, global hedge funds aggressively added bullish USD positioning last week. The quarter-end pension fund rebalancing window is approaching, with an estimated USD 300 billion in asset reallocation scheduled next week, poised to favour USD assets and casting doubt over the sustainability of the current non-US currency recovery.
FX trading desks flagged Friday evening’s US Core PCE Price Index release as the week’s most critical data print. Should core PCE month-on-month and year-on-year readings beat consensus, the US dollar will rapidly erase all of today’s losses, and non-US currencies will resume downward pressure.
VII. Institutional Consensus FX Strategy Roundup
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