Key Highlights:
- US Dollar stabilizes after strong Monday rally fueled by EU-US trade agreement.
- Investors eye US data: Consumer Confidence, JOLTS, and Goods Trade Balance.
- US-China trade negotiations in Stockholm remain in focus.
The US Dollar (USD) took a breather on Tuesday, holding steady near recent highs after surging more than 1% on Monday—its strongest one-day performance since May. The spike came on the back of a surprise trade deal between the United States and the European Union, which boosted investor sentiment and demand for the Greenback.
However, momentum slowed as attention shifted to a busy US data calendar and the ongoing US-China trade talks, where key tariff and tech policy issues are being discussed.
📊 US Dollar Weekly Performance Overview
| Pair | % Change |
|---|---|
| USD/EUR | +1.70% |
| USD/GBP | +0.74% |
| USD/JPY | +0.42% |
| USD/CAD | +0.24% |
| USD/AUD | +0.95% |
| USD/NZD | +0.91% |
| USD/CHF | +1.00% |
The USD gained against all major currencies, with the largest move seen versus the Euro.
🔍 Major Pair Outlooks
🔹 USD/CAD
The pair extended its winning streak, trading just below 1.3750 after Canadian PM Mark Carney warned of retaliatory tariffs complicating trade discussions with the US. Consolidation is likely as investors await further trade headlines.
🔹 AUD/USD
Sank sharply on Monday due to broad USD strength but is now stabilizing above 0.6500. Focus turns to Australia’s Q2 CPI release on Wednesday, a key input for the RBA’s rate outlook.
🔹 EUR/USD
Dropped over 1% on Monday and remains weak below 1.1600 as traders reassess the ECB’s policy direction post trade deal. Weak sentiment persists.
🔹 GBP/USD
Remains under pressure near 1.3350, having lost 0.6% on Monday. UK mortgage and lending data later in the day may offer short-term guidance.
🔹 USD/JPY
Pulling back slightly after hitting 148.70, the highest since early July. Strong US yields and safe-haven outflows continue to support the pair, barring any surprises from BoJ or Fed.
🔹 Gold (XAU/USD)
Started the week with sharp losses, briefly dropping to $3,300, a three-week low. It’s now attempting a modest recovery, hovering around $3,320, as traders look to the FOMC decision.
🗓️ What’s Ahead
- US Economic Data (Today):
- July Consumer Confidence Index
- June JOLTS Job Openings
- June Goods Trade Balance
- Key Events This Week:
- FOMC Rate Decision (Wednesday): Fed expected to hold rates, but Powell’s tone will be crucial.
- US-China Trade Negotiations (Ongoing): Market sensitive to any signs of breakthrough or breakdown.
- Eurozone and US GDP Reports (Later this week): Will shape expectations for ECB and Fed policy moves.
Bottom Line:
The US Dollar rally may pause for breath, but underlying strength persists as traders await pivotal economic data and global trade developments. Cross-asset volatility remains high, and forex markets could see sharp moves in response to central bank signals and geopolitical headlines.
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