S&P expects the Fed will continue to face challenges in reducing inf and addressing financial-market vulnerabilities.

BCA Research FX strategist Artem Sakhbiev says the dollar’s recent rebound looks excessive and lacks the support to break out of last year’s trading range. The Fed’s upward revision to rate forecasts and renewed focus on inflation at last week’s meeting pushed real yields sharply higher and eased pressure for rate cuts, which supported the dollar. Sakhbiev says that move now appears largely exhausted; the Fed may hold rates unchanged and the gap between short- and long-term yields could widen.

Shanghai Gold Exchange gold T+D closed up 1.1% at 882.84 yuan/gram and silver T+D closed up 1.39% at 14,117.0 yuan/kg on June 26.