Forex week in review 26/2026: Starmer resigns, the dollar hits a 13-month high and gold breaks $4,000

The short version: the Federal Reserve's hawkish turn the week before kept doing its work. The US Dollar Index rose for a second week, touching 101.80 on Wednesday, its highest level in just over a year, and closing at 101.36, according to RTTNews. Spot gold fell below $4,000 an ounce for the first time since November 2025. In the UK, Prime Minister Keir Starmer announced his resignation, and the pound finished the week almost exactly where it started. In Australia, a softer-than-expected inflation print knocked AUD/USD down 1.6%, the worst move among the majors.

As in every recap, weekly opens and closes are taken from Yahoo Finance hourly data, Sunday evening open to the Friday 5pm New York close. RTTNews, using its own data, had EUR/USD falling from 1.1469 to 1.1384 and AUD/USD from 0.7013 to 0.6899, within a few pips of our figures. Different feeds will never match to the pip, and that is fine.

Where we left off

Last week, Kevin Warsh's first meeting as Fed chair kept rates at 3.50–3.75% but lifted the median projection for the end of 2026 to 3.8%, implying a possible hike. The dollar jumped, and the week ended with Andy Burnham winning the Makerfield by-election, which opened a path for a challenge to Keir Starmer. If you missed it, read forex week in review, 15–19 June 2026.

So two stories were running into this week: a dollar repricing that had further to go, and a UK leadership question that had suddenly become real.

Monday 22 June: the Prime Minister resigns

Sterling opened weak. Early on Monday it was down 0.2% at $1.321, according to Invezz, amid speculation that Starmer would set out a departure timetable. The pound had lost about 3% since pressure on Starmer began building in February, and UK 10-year gilt yields were around 4.85%, close to their highest since the 2008 financial crisis.

Starmer then announced he would resign as Labour leader. According to LabourList, nominations would open on 9 July, with a candidate needing the support of 20% of Labour MPs (81 MPs) plus local party or affiliate backing. Burnham confirmed he would stand, and Wes Streeting, once seen as a likely rival, backed him instead.

Here is the interesting part. Trading Economics reported that the pound hit its lowest level since March earlier in the session, then rebounded towards $1.33 once the picture became clearer. Investors wanted to know about Burnham's fiscal plans, and the main worry was higher spending and more gilt issuance, but a quick and uncontested handover looked less risky than a long leadership fight.

Elsewhere, reports said US–Iran talks in Switzerland had produced a 60-day roadmap, and Brent crude traded below $80 a barrel.

Tuesday 23 June: the PMIs back the dollar

The flash purchasing managers' indices for June were a clean split between the US and Europe.

• The US S&P Global composite PMI rose to 52.2 from 51.5, with manufacturing at 55.7 and services at 51.3.
• The eurozone HCOB composite PMI rose to 49.5 from 48.5, an improvement but still below the 50 line that separates expansion from contraction.

A reading above 50 means more firms report growth than decline. US activity was expanding at a faster pace while Europe was still shrinking. When one economy looks stronger and its central bank is already leaning hawkish, its currency tends to benefit. Our guide to how economic data moves forex explains why PMIs matter: they come out early in the month and often give the first read on the economy.

The Australian dollar slipped below $0.70, an eleven-week low, according to Trading Economics, as traders waited for Wednesday's inflation data.

Wednesday 24 June: Aussie CPI, a 13-month dollar high and gold below $4,000

Australia: the headline misses, the core does not

The Australian Bureau of Statistics reported that annual CPI eased to 4.0% in May from 4.2% in April. Trading Economics had the consensus at 4.4%. Automotive fuel prices fell 11.9% in the month, after a 7.0% fall in April, which the ABS linked to the halving of fuel excise on 1 April and lower world oil prices. Electricity, by contrast, was up 21.1% on the year as government rebates ended.

The RBA's preferred measure, trimmed-mean inflation, actually rose to 3.6% from 3.4%, slightly above the 3.5% forecast. So the core was sticky while the headline was soft. The market focused on the headline, and the Aussie fell. This is a good example of why you need to know which number a central bank cares about before the release. The RBA had held rates at 4.35% the week before, after three hikes, and a lower headline reduced the pressure for a fourth.

The dollar peaks for the week

The Dollar Index reached 101.80 on Wednesday, its highest level in just over a year, according to FXStreet. EUR/USD hit its weekly low of 1.1329 on the same day, and GBP/USD bottomed at 1.3140.

Gold breaks a round number

Spot gold dropped below $4,000 an ounce for the first time since November 2025, according to a report carried by BNN Bloomberg. It had hit a record $5,594.82 in late January, so by Wednesday it had lost more than $1,500 an ounce. Metals trader Tai Wong described the dollar as "at 13-month highs" and said the market was pricing a hike "as soon as September".

Gold pays no interest. When the market expects higher interest rates, the opportunity cost of holding it rises, and a stronger dollar makes it more expensive for buyers paying in other currencies. Both forces were pushing the same way.

Thursday 25 June: PCE in line, GDP revised up

The US PCE price index, the Fed's preferred inflation gauge, rose 4.1% in the year to May, up from 3.8% in April. Core PCE rose 3.4%. Both were in line with expectations. On the month, headline PCE rose 0.4% (the market had feared 0.5%) and core 0.3%. The final estimate of first-quarter GDP growth was revised up to 2.1% from 1.6%.

In-line data is not nothing. After a week in which the market had moved hard towards rate hikes, a print that was no worse than feared allowed some of that to come out. USD/JPY reached its weekly high of 161.95 on Thursday, but the dollar elsewhere stopped climbing.

Friday 26 June: the hike odds ease

By Friday, the CME FedWatch probability of a quarter-point Fed hike at the July meeting had slipped to 30% from 36% on Monday, according to RTTNews. AUD/USD touched 0.6875, its weekly low, and EUR/USD recovered towards 1.1410 before giving some of it back.

The ECB also gave the euro a little help during the week. Executive Board member Isabel Schnabel said the ECB was not done tightening and that further hikes would likely be needed to return inflation to 2%. Eurozone data also showed median 12-month inflation expectations falling to 3.5% in May from 4.0% in each of the two previous months, according to RTTNews.

On the oil side, FXStreet noted that progress in US–Iran talks had pushed crude sharply lower and that traffic through the Strait of Hormuz appeared close to normal, though Iran wanted control over the routes and tolls on vessels. The interim memorandum left the handling of Iran's enriched material to a mechanism yet to be agreed.

Pair by pair

EUR/USD: -0.66%

A second weekly loss. The pair dropped from 1.1467 to a low of 1.1329 on Wednesday, then recovered to finish at 1.1391. The euro had some support from hawkish ECB comments, which is why it fell less than the commodity currencies. The euro is the largest component of the Dollar Index by far, so most of the index's 0.51% gain was EUR/USD's loss.

GBP/USD: -0.09%

The Prime Minister of the United Kingdom resigned, and cable moved 12 pips on the week. That is not because politics does not matter to currencies, it obviously does. It is because the market had spent months pricing the risk of a messy leadership challenge, and the actual outcome (a timetable, a front-runner and an endorsement from the main rival) was less messy than feared. EUR/GBP fell 0.62% on the week, which tells you sterling actually outperformed the euro.

USD/JPY: +0.15%

The pair edged higher, reaching 161.95. Japanese authorities had intervened in late April and May, and the yen was again close to its weakest level in four decades. A pair that is drifting towards a level where the government has already acted tends to trade nervously, with sharp but short moves. See slippage explained for what happens to orders when a market gaps on an intervention headline.

AUD/USD: -1.60%

The worst-performing major. A headline CPI miss, falling commodity prices and a firm dollar all pushed in the same direction. The pair started the week at 0.7008 and finished at 0.6896, after slipping below 0.70 to an eleven-week low on Tuesday.

NZD/USD: -1.66%

The kiwi had been the dollar's biggest victim the week before as well. Two consecutive weeks of declines took NZD/USD from about 0.5858 at the start of the previous week to 0.5640.

Gold: -1.62% (futures)

COMEX gold futures opened at $4,163.90 and closed at $4,096.30, after a low of $3,975.70. The recovery from the low into Friday came as the hike odds faded slightly. Note that we are quoting futures here; spot gold, which most CFD brokers price from, trades at a slightly different level.

A worked example: what a gold move does to margin

Gold is one of the most popular CFD markets and one of the most volatile. Here is an illustrative example using this week's futures range. Your broker's contract size, margin and pricing will differ.

• A standard gold CFD contract is often 100 ounces. At $4,160, one contract is worth $416,000 of exposure.
• Under ESMA rules, retail leverage on gold is capped at 20:1, so the initial margin for one contract would be about $20,800.
• From Monday's open at $4,163.90 to Wednesday's low at $3,975.70, gold fell $188.20 an ounce. On 100 ounces, that is a loss of $18,820, or roughly 90% of the margin posted.

At that point most brokers would have closed the position. Under EU rules, retail accounts must be closed out when equity falls to 50% of the required margin, which would have happened long before the low. Our guide to margin calls and stop-outs walks through the calculation, and ESMA leverage limits and negative balance protection explains why you cannot lose more than your account balance with an EU-regulated broker.

Now the same idea scaled down. A trader with a $10,000 account who trades 0.05 contracts (5 ounces) has $20,800 of exposure, about twice the account size. The same $188 drop costs $941, a little under 10% of the account. That is still a lot for one trade, which is why most professional risk frameworks start from how much you are prepared to lose, not how much margin is available. See position sizing for the method.

Most retail CFD accounts lose money. Brokers' own disclosures typically show between 61% and 89% of retail accounts losing, and leverage magnifies losses in exactly the way this example shows.

What this week teaches

1. Uncertainty often costs more than the bad news itself

Sterling did not fall on the day the Prime Minister resigned. It had fallen in the months before, while the outcome was unclear. Once the path was visible, the pound stabilised. If you trade politics, ask what is already priced, not just what happened.

2. Know which inflation number matters

Australia's headline CPI fell while the core measure rose. The headline drove the first reaction. Central banks generally care more about core or trimmed-mean measures, so the first move is not always the lasting one. Our guide to using an economic calendar explains how to read actual, consensus and previous figures, and why the core line matters.

3. Round numbers are psychological, not magical

Gold breaking $4,000 made headlines everywhere. It did not change anything fundamental; the drivers were the dollar and rate expectations. But round numbers attract orders and stop-losses, which is why price often accelerates through them or bounces off them. Read support and resistance for how traders think about these levels without treating them as certainties.

4. In-line data can still move markets

US PCE matched expectations. After a week of aggressive hike pricing, matching expectations was enough to take some of it back. The market reacts to the gap between what is priced and what is reported, which is why we always quote the consensus.

Scheduled next week (29 June–3 July)

These are the events on the calendar; we do not forecast their effect on prices.

• From Monday 29 June: the ECB Forum on Central Banking in Sintra, Portugal, with ECB President Christine Lagarde and Fed Chair Kevin Warsh both expected to speak.
• Wednesday 1 July: eurozone flash HICP inflation for June. US data during the week also include JOLTS job openings, ADP employment, Challenger job cuts and the ISM manufacturing survey.
• Thursday 2 July: US nonfarm payrolls for June, brought forward a day because of the holiday.
• Friday 3 July: US markets closed for Independence Day (observed, as 4 July falls on a Saturday). Expect thin liquidity in the New York session.

Next week's recap: forex week in review, 29 June–3 July 2026. For background on why so many retail traders struggle in trending dollar weeks like this one, read why most retail CFD traders lose.

Sources

• RTTNews: Fed hike bets lift dollar despite falling oil prices and ebbing inflation fears
• FXStreet: EUR/USD weekly forecast, US employment and central bank leaders take the stage
• Australian Bureau of Statistics: CPI rose 4.0% in the year to May 2026
• Trading Economics: Aussie dollar extends decline to 11-week low
• FXStreet: Australian dollar nears three-month low ahead of Australian CPI data
• BNN Bloomberg: Gold falls below US$4,000/oz on strong US dollar, hawkish Fed signals
• Invezz: Pound under pressure as Starmer exit speculation rattles markets
• Trading Economics: Sterling rebounds after Starmer's resignation
• LabourList: Labour leadership election after Starmer's resignation
• Yahoo Finance: EUR/USD historical data (also GBPUSD=X, JPY=X, AUDUSD=X, NZDUSD=X, GC=F)