Forex Today: Investors ignore Middle East tensions, shift focus to ECB rate decision

Here is what you need to know on Thursday, June 11:

Major currency pairs hold steady in the European session on Thursday following Wednesday's volatile action. In the second half of the day, the European Central Bank's (ECB) monetary policy decisions and producer inflation data from the United States (US) will be watched closely by market participants.

On Wednesday, the data from the US showed that annual inflation, as measured by the change in the Consumer Price Index (CPI), climbed to its highest level in three years at 4.2% in May. On a monthly basis, the core CPI, which excludes volatile food and energy prices, rose by 0.2%, at a slower pace than the 0.4% increase recorded in April and the market expectation of 0.3%. Although the US Dollar (USD) Index edged lower with the immediate reaction to May inflation data, it benefited from safe-haven flows and regained its traction in the American session. Wall Street's main indexes registered large losses on Wednesday and the USD Index closed the day with small gains above 100.00.

Meanwhile, tensions in the Midde East remain high as the US and Iran continue to exchange fires. After US President Donald Trump said that Tehran is taking too long to make a deal, the US military announced that it launched attacks "against multiple targets in Iran" and described them as "self-defense." In response, Iran’s Islamic Revolutionary Guards Corps (IRGC) targeted US forces in bases in Kuwait, Bahrain, and Jordan. President Trump also said that Iranian officials asked him to halt the latest attack, per Fox News.

Crude Oil prices correct lower early Thursday. After rising more than 3% on Wednesday, the barrel of West Texas Intermediate trades near $88, losing about 2.5% on a daily basis. In the meantime, US stock index futures rise between 0.6% and 1% and the USD Index trades marginally lower on the day, slightly below 100.00.

The ECB is forecast to raise key rates by 25 basis points after the policy meeting. Revised macroeconomic projections and comments from ECB President Christine Lagarde will be scrutinized by market participants. EUR/USD holds steady at around 1.1500 in the European morning on Thursday.

The Bank of Canada (BoC) left its interest rate unchanged at 2.25%, as anticipated, on Wednesday. The policy statement and comments from BoC Governor Tiff Macklem reinforced a patient approach, noting that policymakers continue to balance lingering inflation risks against an economy that remains in excess supply. After closing virtually unchanged on Wednesday, USD/CAD edges higher and trades above 1.3950 on Thursday.

USD/JPY registered small gains on Wednesday. The pair continued to push higher and reached its strongest level near 160.60 since the Japan intervened in the foreign exchange market on April 30. The pair stays relatively quiet in the European morning and moves sideways near 160.50.

GBP/USD treads water in a narrow band below 1.3400 in the early European session on Thursday.

Gold lost more than 4% on Wednesday and extended its slide in the early Asian session. After touching its lowest level since November 2025 below $4,030, Gold manages to stage a rebound and trades in positive territory near $4,100.