Dollar falls on dovish Fed comments, traders anticipate rate cuts

From Yahoo Finance: 2025-06-22 21:22:00

The dollar fell on Monday after Fed official Michelle Bowman suggested interest rate cuts and amid expectations of limited Iranian retaliation to U.S. bombings. Traders anticipate 58 basis points in cuts this year, with a possible third cut. Fed Governor Christopher Waller also hinted at rate reductions, causing a surge in rate cut bets.

Iran retaliated with a missile attack on a U.S. airbase in Qatar, but no U.S. personnel were harmed. Traders unwound risky positions due to Middle East tensions, lifting the dollar. The Japanese yen rebounded on concerns about higher oil prices for Japan, with strategists warning of further dollar/yen repricing if oil prices remain elevated.

The euro gained against the dollar as the euro zone economy stagnated in June. Sterling strengthened after data showed British business activity expanding modestly. Bitcoin rose in cryptocurrencies. Fed Chair Jerome Powell will testify before Congress.



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