USD exchange rate today (June 18): USD experienced a sharp decline week after the Fed meeting

USD exchange rate in the world last week

The USD Index (DXY), which measures the greenback's movements against six major currencies, stood at 102.30, down 1.21%.

Chart of DXY Index fluctuations over the past week. Photo: Marketwatch

The US dollar edged up 0.07% to 103.63 in early trading on Monday as investors remained cautious ahead of a number of key policy decisions this week, with the US Federal Reserve expected to keep interest rates unchanged at its June policy meeting. According to FedWatch, the money market is leaning towards the Fed pausing its June rate hike, but most expect the Fed to raise rates at its July meeting.

The DXY index slid to 103.02 on June 14 and 15 as the Fed decided to keep interest rates unchanged as expected. The federal funds rate is expected to peak at 5.6% this year, meaning two more 25 basis point hikes in 2023. That's up from the 5.1% estimate in the last set of forecasts released in March. Traders are now pricing in a 70% chance that the Fed will raise rates again next month after skipping a rate hike in June.

On June 16, the greenback plunged to 102.13 after the European Central Bank (ECB) raised interest rates, a day after the Fed paused its eighth consecutive rate hike and signaled the need for further policy tightening to bring eurozone inflation back to its 2% target. Accordingly, the ECB raised interest rates by 25 basis points (bps) as expected, bringing interest rates to 3.5% - the highest level in 22 years.

The dollar rose 0.18% to 102.30 on the final trading day of the week. The greenback’s rebound was driven by a weaker yen after the Bank of Japan (BOJ) decided to maintain its ultra-low interest rate policy and forecast slower inflation later this year. As widely expected, the BOJ maintained its short-term interest rate target of -0.1% and its 0% cap on 10-year bond yields under its yield curve control (YCC) policy.

Meanwhile, the euro was poised for its best week against the dollar as the ECB raised borrowing costs to a 22-year high and hinted at further tightening. Meanwhile, sterling rose 0.4% to $1.2831 after rising to its highest since April 2022 as traders bet the Bank of England would raise interest rates at its 13th straight meeting next week.

USD exchange rate today (June 18): USD experienced a sharp decline week after the Fed meeting. Illustration photo: Reuters.

Domestic USD exchange rate today

In the domestic market, at the end of the trading session on June 16, the State Bank announced the central exchange rate of the Vietnamese Dong to the USD increased by 7 VND, currently at: 23,711 VND.

* The reference exchange rate at the State Bank's transaction office increased slightly, currently at: 23,400 VND - 24,846 VND.

USD exchange rates at commercial banks are as follows: