On June 10th, observers of the Bank of Japan anticipate two benchmark rate hikes this year, with the first likely occurring next week, as concerns grow that tensions involving Iran could fuel persistent inflation. A survey of 51 economists revealed that approximately 49 expect the BOJ's policy board to raise its key rate by 25 basis points to 1% at its two-day meeting concluding June 16th, which would be its highest level since 1995. The poll also indicated expectations for the rate to reach 1.25% by year-end, implying one further hike. This survey comes as elevated global oil prices are prompting monetary authorities worldwide to adopt a more hawkish stance. The European Central Bank is widely expected to implement its first rate hike of 2023 this week, while several Federal Reserve officials have recently shifted their tone, hinting at the possibility of a rate increase before year-end.

Additionally, data released Tuesday by the National Association of Realtors showed that U.S. existing home sales rose 3.2% month-over-month in May to a seasonally adjusted annual rate of 4.17 million units, marking the fastest sales pace this year and exceeding all economist forecasts in a media survey. This represents another positive signal following years of weakness in the U.S. housing market. For roughly three years, the annualized sales pace had hovered around 4 million units, with high borrowing costs and rising prices suppressing demand. The latest figures suggest the market is gradually recovering. NAR Chief Economist Lawrence Yun stated, "More Americans are re-entering the housing market, with May sales reaching the highest level since last December. This is positive news for the housing market and the overall economy."

Key data to watch today includes the U.S. May CPI year-over-year (unadjusted), the U.S. May CPI reading (unadjusted), and the U.S. June IPSOS Primary Consumer Sentiment Index (PCSI). Furthermore, the Bank of Canada's interest rate decision this evening warrants close attention.

Gold/US Dollar

Gold declined in choppy trading yesterday, hitting a fresh 11-week low, with the current exchange rate hovering near 4205. The primary factor pressuring gold lower is the sustained intensification of expectations for a Federal Reserve rate hike. Additionally, fading hopes for Middle East peace and the rekindling of geopolitical tensions also exerted some downward pressure. However, a softer U.S. dollar index limited the extent of the decline. Focus today is on resistance near 4250, with support around 4150.

U.S. Dollar/Japanese Yen

The USD/JPY pair edged higher in volatile trading yesterday, closing modestly up, with the current exchange rate near 160.30. Support stemmed from the ongoing firming of Fed rate hike expectations, alongside renewed geopolitical tensions boosting safe-haven demand for the U.S. dollar. However, concerns over potential renewed Japanese intervention in the currency market and expectations for a Bank of Japan rate hike capped the pair's upside. Focus today is on resistance near 161.00, with support around 159.50.

U.S. Dollar/Canadian Dollar

The USD/CAD pair retreated after an earlier advance yesterday, closing slightly lower, with the current exchange rate near 1.3940. The pair faced pressure from profit-taking and technical selling interest around the 1.4000 psychological level, coupled with a weaker U.S. dollar. However, a pullback in crude oil prices limited the pair's corrective decline. Focus today is on resistance near 1.4050, with support around 1.3850.