U.S. Dollar on Pace for Best June in Year as Rate-Hike Bets Rise; Institutions Forecast 5% Upside by Year-End

According to major Wall Street banks including JPMorgan Chase, Goldman Sachs, and Bank of America, the U.S. dollar is on track for its best June performance in a year, driven by Federal Reserve Chair Kevin Warsh's recent commitment to price stability, which has intensified expectations for potential interest rate hikes. Meera Chandan, JPMorgan's global FX strategy co-head, stated that the Fed has "activated" a bullish dollar outlook.

Man Group forecasts the dollar could appreciate an additional 5% by year-end, while TD Securities projects roughly 2% upside in the third quarter. Bank of America downgraded its year-end euro forecast to 1.15 USD, citing expectations for three Fed rate hikes in 2026. Meanwhile, the European Central Bank's downward revision of rate-hike expectations sent the euro to a one-year low.