Forex Today: Currencies maintain calm ahead of US CPI

The key event of the day will be the US CPI report for July. During the Asian session, wholesale inflation data is due in Japan, and in Australia, the Melbourne Institute Inflation Expectations report.

Here is what you need to know on Thursday, August 10:

Thursday is the key day in a relatively quiet week in terms of economic data, with the focus on US inflation data. The Consumer Price Index (CPI) is expected to show a rebound in the annual rate from 3% to 3.3%, while the Core rate is anticipated to remain at 4.8%. The weekly Jobless Claims report will also be relevant.

US CPI Preview: Forecasts from 10 major banks, monthly pace should hold at 0.2%

The inflation figures in the US are likely to trigger volatility, and market participants are eagerly awaiting the data. Prior to the report, the US Dollar posted mixed results on Wednesday, maintaining relative strength overall.

US stocks experienced a decline, with the Nasdaq falling 1.17% and the Dow Jones losing 0.54%. Crude oil prices, on the other hand, rose to fresh multi-month highs, with the WTI barrel climbing 1.60% and breaking above $84.00.

The US 10-year Treasury auction received decent demand. Its yield fell modestly to 4.01%, while the 2-year rebounded to 4.80%.

In a quiet session for currencies, the US Dollar Index experienced a marginal decline, consolidating around 102.50 as market participants await US inflation data.

EUR/USD modestly rose to 1.0970 as the Euro outperformed following the Italian government's decision to water down its windfall tax on banks by implementing caps on payouts. The European Central Bank (ECB) will release its Economic Bulletin, and Italy will report the final reading of July inflation.

USD/CHF rose for the second consecutive day but remains below 0.88000. EUR/CHF rebounded from 0.9580 to 0.9630 on Wednesday after the clarification regarding Italy's new windfall tax on banks.

GBP/USD remains range-bound around 1.2750. On Friday, the UK will report GDP and Industrial Production data.

USD/CAD marginally rose, closing slightly above 1.3420 but still far from its highs.

Analysts at Commerzbank on the Loonie:

The Bank of Canada surprisingly ended its interest rate pause at the beginning of June. It has since raised the key interest rate in two steps to 5%. Market expectations that it would raise rates further by the end of the year crumbled recently, which weighed on the CAD at the beginning of August, as did global factors. However, we maintain our outlook and see moderate CAD recovery potential in the medium term.

AUD/USD traded within Tuesday's range, remaining stagnant near 0.6540. The bias continues to favor the downside, influenced by cautious market sentiment and declining commodity prices. On Thursday, the Melbourne Institute is set to release the inflation expectations report.

NZD/USD recorded its lowest daily close in two months around 0.6050 but managed to hold above the key support level of 0.6030.

Gold prices continued to decline, marking the third consecutive day of losses and recording the lowest daily close in a month at $1,914. Similarly, Silver also lost ground, falling to $22.65. Precious metals remain under pressure, struggling to initiate a sustainable recovery and showing no signs of a correction.

---