The USD is mostly lower ahead of the Fed interest rate decision

As markets await the U.S. Federal Reserve’s rate decision at 2 PM ET—where no change is expected—the U.S. dollar is trading mostly – but modestly – lower. The greenback is only higher versus the Swiss franc, up by 0.20%, while it is weakest against the Japanese yen (-0.25%) and the Australian dollar (-0.28%). This comes after a strong move higher yesterday, particularly against the British pound, where the USD gained over 1%. Today, however, the USD is down 0.14% versus the pound.

In economic data this morning, the EU CPI came in as expected at 2.3% for the headline 1.9% for the core measure. The ECB has cut rates 10 times since the peak. It is expected that they would slow down/stop the declines as rates are now considered expansionary.

In the video above, I provide a technical look at the EURUSD, USDJPY, and GBPUSD currency pairs. The focus is on current bias, risk levels, and key targets. It’s a good way to start your day—especially with the looming Fed decision later this afternoon.

The Federal Reserve is expected to keep rates unchanged for the fifth consecutive meeting. Previously, the Fed had cut rates by a full 100 basis points—from 5.5% to 4.5%. Market participants are now turning their attention to forward guidance. Will the Fed lean toward further easing as inflation remains stubbornly above the 2% target, global peers cut rates more aggressively, and signs of slower growth begin to emerge? Tariff-related uncertainty is also a growing factor, complicating the inflation-growth dynamic.

So far, the Fed has resisted making strong pivots despite growing concerns. Economic visibility remains limited, clouded by the potential inflationary impact of tariffs, domestic fiscal policy decisions, and heightened geopolitical risk. Today’s meeting also includes an update to the central bank’s economic projections and the “dot plot,” which tends to heighten market tension—especially at economic inflection points. The key questions: Does the Fed now expect slower growth? What are their latest inflation forecasts? And where do they see interest rates heading in the second half of the year?

On the economic data front, U.S. mortgage applications fell by 2.6% this week, with the average 30-year mortgage rate easing slightly from 6.93% to 6.84%. At 8:30 AM ET, just ahead of the Fed announcement, building permits and housing starts will be released. Permits are expected to rise to 1.428 million (from 1.412 million), while starts are forecast to slip to 1.357 million from 1.361 million.

Initial and continuing jobless claims will also be released this morning at 8:30 AM ET. The earlier-than-usual release is due to the Juneteenth National Independence Day holiday being observed tomorrow. The expectations is for initial jobs claims to remain fairly steady at 245K versus 248K last week. Continuing claims are expected to dip slightly to 1.932 million from 1.956 million last week.

Finally, geopolitics continues to weigh on sentiment. President Trump and Iran’s Supreme Leader have exchanged threats, with Tehran warning that any attack on Iran would result in “irreparable damage” to the U.S. Will the US get involved?, Will they supply Israel with their bunker buster technology? Will they stay out of it and continue to negotiate for a peace settlement?

Looking at the snapshot of the other markets to kickstart the US session. In the US stock market the futures are implying:

• Dow industrial average +32.2 points
• S&P index +8.78 points
• Nasdaq index +47.67 points

In the US debt market, yields are marginally lower after moving lower yesterday:

• 2-year yield 3.947%, -0.2 basis points
• 5-year yield 3.976%, -1.0 basis points
• 10 year yield 4.375%, -1.6 basis points
• 30 year yield 4.872%, -2.0 basis

In other markets,:

• Crude oil futures are up $0.29 at $73.56
• Gold is down five dollars at $3384.17
• Bitcoin is trading little changed at $104,414.