Brent OIL

The Bank of Japan may keep interest rates at 1% in July, but market participants are still watching for a possible move to 1.25% later this year. Yen weakness, rising producer prices and oil above $90 are keeping inflation risks firmly on the policy radar.

The U.S. dollar gained ground as a sharp oil rally and stronger-than-expected U.S. jobless claims data lifted demand for safe-haven assets. EUR/USD, GBP/USD, USD/CAD and USD/JPY all traded around important technical levels as markets weighed central bank signals, Treasury yields and commodity shocks.

The European Central Bank is expected to avoid firm guidance as renewed energy-price pressure and geopolitical risk complicate the path beyond July. Market participants are still pricing the possibility of further tightening by September and another move before year-end.

Gold advanced above the $4,050 level after U.S. inflation cooled more than analysts expected, pushing Treasury yields and the dollar lower. Silver tested the $60.00 area while platinum challenged resistance at $1,600 to $1,620 amid a broad precious metals rally.

The U.S. Dollar Index gained ground as traders reacted to geopolitical tension, a sharp rise in oil prices, and firmer Treasury yields. EUR/USD and GBP/USD weakened, USD/CAD hovered near support, and USD/JPY advanced toward the 162.50 area.