Daily Forex Highlights — May 25

VG Markets · 2026-05-25T06:53:11Z
Daily Forex Highlights — May 25

🎯 Top Story

🇺🇸 Warsh sworn in as Fed chair, pledges a "reform-oriented" approach


What happened: Kevin Warsh was sworn in as Federal Reserve chair. He emphasized that the Fed will take a "reform-oriented" approach.


Why it matters: A new era at the Fed begins. Markets will be watching closely for any policy shifts under Warsh's leadership.


Market impact: 🟡 Neutral for now. The direction of policy change is still unclear.



🔥 Quick Takes


💵 Dollar

  • 🇺🇸 Warsh sworn in as Fed chair, vows "reform-oriented" approach → See Top Story.
  • 🇺🇸 Fed Governor Waller: Given rising inflation risks, the Fed should no longer treat further rate cuts as the default plan. The current stance is to keep rates steady in the near term. If inflation expectations become unanchored, rate hikes would be needed. → A clear hawkish shift. The Fed is done talking about cuts.


💶 Euro

  • 🇪🇺 ECB's Demarco: The ECB may need to hike rates in June → Another hawkish voice. A June hike is looking increasingly likely.
  • 🇪🇺 ECB President Lagarde: Long-term inflation expectations remain broadly anchored. Will take necessary measures to ensure prices stabilize at 2 percent. The ECB may revise its inflation outlook in June. → A balanced tone, but the door to a June hike is open.


💴 Yen

  • 🇯🇵 BOJ Governor Ueda: Explained the BOJ's monetary policy thinking to the prime minister. When asked about market expectations for a June rate hike, he said no specific details were discussed. The prime minister made no special requests. → A neutral signal. No pressure from the government, but no commitment on timing either.


🌏 Other

  • 🇮🇳 RBI: India's forex reserves remain at comfortable levels → A reassurance. The RBI has plenty of firepower.
  • 🇮🇳 RBI governor makes rare comment: The rupee may be undervalued → A significant statement. The RBI is signaling that it sees the currency as too weak.
  • 🇰🇷 Bank of Korea and finance ministry: Financial authorities are closely watching FX markets → Verbal intervention. The won is under scrutiny.


📊 Key Data Snapshot


💡 Final Takeaway

🇺🇸 Warsh is now officially Fed chair. Waller says the Fed should no longer treat rate cuts as the default plan — a clear hawkish shift.


🇪🇺 ECB officials are talking up a possible June hike.


🇯🇵 Ueda gave no clues on June.


🇮🇳 The RBI says the rupee may be undervalued, a rare and significant comment.


🇰🇷 Korea is watching FX closely. The dollar remains supported while global policy paths continue to diverge.


🔮 Looking Ahead


  • 🇺🇸 More Fed speakers — will they echo Waller's hawkishness?
  • 🇪🇺 ECB June meeting — hike or hold?
  • 🇯🇵 BOJ June meeting — will Ueda deliver a hike?
  • 🇮🇳 RBI intervention — will they act on the undervalued rupee?
  • 🇰🇷 Korea FX market monitoring — any concrete steps?