Dollar strengthens on better-than-expected US retail sales, pending home sales

Rich Asplund Wed, June 17, 2026 at 7:36 AM PDT | 4 min read

• DX-Y.NYB +0.71%
• ^EURUSD
• ^USDJPY
• SI*0
• DXY00

The dollar index (DXY00) is up +0.12% today, supported by stronger-than-expected US economic reports on May retail sales and May pending home sales. Short covering ahead of the conclusion of the two-day FOMC meeting is also providing support for the dollar.

Market attention will turn to the FOMC meeting's conclusion later today—the first under new Fed Chair Kevin Warsh. While the Fed is expected to keep interest rates unchanged, the focus will be on how Warsh navigates the post-meeting press conference and the outlook for inflation.

US Economic Data

• May retail sales rose +0.9% month-over-month, above expectations of +0.6%.
• May retail sales ex-autos rose +0.8% month-over-month, above expectations of +0.6%.
• May pending home sales rose +3.8% month-over-month, well above expectations of +0.9% and marking the largest increase in 20 months.

Swaps markets are pricing a 5% probability of a +25 basis point rate cut at the conclusion of today's FOMC meeting.

EUR/USD (^EURUSD)

The euro is down -0.14% today, weighed down by a stronger dollar. A decline in the German 10-year Bund yield to a 1.75-month low of 2.914% weakened the euro's interest rate differentials, a bearish factor.

Losses in the euro are limited, however, after the Eurozone May core CPI was revised upward—a hawkish signal for ECB policy. Hawkish comments from ECB Governing Council member Gediminas Simkus also supported the euro; he stated that at least one more rate hike from the ECB is probable.

• Eurozone May core CPI was revised upward to 2.6% year-over-year from the previously reported 2.5%, the strongest pace of increase in 13 months.
• ECB's Simkus said, "The pass-through of the increase in energy and other raw material prices to the market has already occurred," adding that "at least one more rate increase is certainly more likely than not."
• Markets are pricing a 16% chance of a +25 basis point rate hike by the ECB at its next policy meeting on July 23.

USD/JPY (^USDJPY)

The yen is up -0.10% today, moving higher on stronger-than-expected Japanese economic data:

• April core machine orders rose +8.7% month-over-month, well above expectations of +0.5%.
• May exports rose 17.0% year-over-year, above the expected 16.5% and the strongest in 3.5 years.
• May imports rose +12.5% year-over-year, the most in 16 months but slightly below expectations of +12.8%.

The yen also found support after the chairman of Japan's cross-party policy group proposed cutting Japan's consumption tax on food to 1%, a move that could boost consumer spending.

Markets are pricing a 1% chance of a +25 basis point rate hike by the Bank of Japan at its next policy meeting on July 31.

Precious Metals

• August COMEX gold (GCQ26): Up +7.00 (+0.16%)
• July COMEX silver (SIN26): Up +0.387 (+0.55%)

Gold and silver recovered from early losses and moved higher. Precious metals have carryover support from Monday, when the US and Iran agreed to a peace accord allowing the reopening of the Strait of Hormuz. This has driven crude oil prices lower, reducing inflation expectations and potentially encouraging central banks to pursue easier monetary policies—a bullish factor for precious metals.

Gains are limited today amid a stronger dollar and strength in equities, which curbed safe-haven demand. Long liquidation pressures are also weighing on metals ahead of the FOMC meeting's conclusion.

Recent fund liquidation is bearish for prices:

• Gold ETF holdings fell to a 7.25-month low on Tuesday, after reaching a 3.5-year high on February 27.
• Silver ETF holdings fell to a 10.5-month low on Monday, down from a 3.5-year high posted on December 23.

Strong central bank demand for gold remains supportive.

More from Barchart:

• Dollar Slips on Weak US Housing News and Lower Crude Prices
• Dollar Little Changed on Weak US Housing News
• Dollar Jumps on Hawkish Fed

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