Forex Today: Dollar consolidates gains ahead of Fed

Valeria Bednarik FXStreet

What you need to know on Monday, July 26:

The dollar retained its strength heading into the weekly close but was unable to extend gains. Appetite for high-yielding assets dented demand for the greenback, while US indexes closed at all-time highs. Government bond yields maintained the positive tone, and settled near the upper end of their weekly range, also reflecting a better market mood.

Data released on Friday indicated that the economic recovery continued at an uneven pace in July. Markit published the flash July PMIs. European indexes were mostly upbeat, while in the US and the UK the services sector contracted.

Majors remained range-bound at the end of the week, consolidating losses against their American rival, as the US Federal Reserve looms. Choppy trading will likely prevail ahead of Wednesday when the central bank will announce its decision on monetary policy. The focus is on tapering. The central bank will likely hint some action for the last quarter of the year.

Gold finished the week with modest losses just above the 1,800 mark. Crude oil prices posted a nice comeback by the end of the week, with WTI settling at $72.15 a barrel.

Dogecoin price fumbles the opportunity, but DOGE clings to bullish aspirations

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD stays below 1.3400 after soft UK CPI data

GBP/USD struggles to gain traction and stays below 1.3400 in the second half of the day on Wednesday. The UK annual Consumer Price Index (CPI) inflation cooled to 2.6% in June against the market forecast of 2.7%, making it difficult for the British Pound gather recovery momentum. Meanwhile, investors keep a close eye on headlines coming out of the Middle East.

EUR/USD stabilizes near 1.1400 as markets focus on geopolitics

EUR/USD trades in a narrow channel at around 1.1400 on Wednesday. In the absence of high-impact data releases, escalating geopolitical tensions in the Middle East caps the pair's upside. On Thursday, the European Central Bank (ECB) will announce monetary policy decisions.

Gold extends rally as Middle East concerns intensify

Gold extends gains for the fourth consecutive day, standing comfortably above $4,100, unfazed by the risk-off market amid rising tensions in Iran and higher Oil prices. The pair has rallied nearly 2.5% so far this week and is on track for its best weekly performance in more than three months.

Australia unemployment rate set to steady at 4.4% in June, signaling strong job market

Australia will publish the June monthly employment report on Thursday at 01:30 GMT, and market participants expect a modest increase in job creation in the land Down Under. The Australian Bureau of Statistics is expected to announce that the country added 15K new jobs in the month, while the Unemployment Rate is forecast at 4.4%, unchanged from May.

US – Fed preview: A divided hold

The first month after Kevin Warsh's debut at the FOMC's June meeting has brought mixed signals on the inflation front. On one hand, the re-escalation of the war in Iran has lifted energy prices higher again. Yet on the other hand, Warsh's hawkish comments have already lifted real rates, supported broad USD and tightened financial conditions while realized inflation surprised to the downside in June.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.