The U.S. dollar continued its upward momentum following the Federal Reserve's meeting, while the Japanese yen fell to a near two-year low. The British pound weakened after the Bank of England held interest rates steady.

A key Bloomberg index tracking the dollar rose by 0.3%, reversing earlier losses seen during Asian trading hours after news of a provisional agreement between Trump and Iran to end the war.

Following the Fed's policy announcement, the U.S. Treasury yield curve flattened, with the yield on the 10-year note falling 3 basis points to 4.46%.

Earlier data showed initial jobless claims for the week ending June 13 fell to 226,000.

Recent figures from CLS Market Solutions indicated foreign exchange market trading volumes increased in May, recovering from a sharp decline in April.

The dollar/yen pair climbed 0.7% to a high of 161.81 before paring gains, stabilizing near 161 after briefly dipping to that level.

Strategists noted that markets are closely watching the risk of yen intervention after the Fed adopted a hawkish stance in its first policy meeting under new Chair Kevin Warsh.

Immediately after the Bank of England's rate decision, the pound/dollar pair fell 0.7% to 1.3197, a two-month low, before trimming losses to trade around 1.3236.

The Bank of England kept its key rate at 3.75%, stating that recent declines in oil prices were "encouraging."

The euro/dollar pair dropped 0.4% to a low of 1.1454, its weakest level since March, before paring some of the decline.

The euro/Swiss franc pair rose 0.3% to 0.9226. The Swiss National Bank held rates steady on Thursday, maintaining its readiness to sell francs to guard against renewed geopolitical turbulence.

The euro/Norwegian krone pair advanced 0.9% to 11.1569, reaching a two-month high. Norway's central bank kept its benchmark rate unchanged but signaled a potential for further policy tightening to address the region's elevated inflationary pressures.

The New Zealand dollar/U.S. dollar pair fell 0.2% to 0.5755.

New Zealand's economy rebounded in the first quarter, growing 0.8%, which was higher than the upwardly revised 0.5% growth in the fourth quarter. This was primarily driven by lower interest rates and a recovery in spending, although the data largely reflects conditions before the U.S.-Iran war.