Forex Today: Dollar holds high ground against most currencies ahead of FOMC minutes, oil, gold cool

Here is what you need to know on Wednesday, July 7:

Markets have stabilized and the dollar is holding onto its gains after weak US data and ahead of the FOMC Meeting Minutes. Oil and gold are off their highs despite bullish factors while cryptocurrencies are edging higher. US JOLTs job openings, EU Economic Forecasts and covid headlines are also eyed.

The US dollar refused to retreat despite a substantial slide in bond yields. Returns on 10-year Treasuries fell to around 1.36% after the ISM Services Purchasing Managers' Index dropped to 60.1 in June, significantly more than expected. The only exception is USD/JPY which was dragged lower.

See What yield drop ahead of Fed minutes means for the dollar

Concerns about the health of the US economy only temporarily replaced the upbeat mood following Friday's Nonfarm Payrolls report on Friday. The focus now shifts to the Federal Reserve's meeting minutes from the June meeting. Back then, the Fed made a substantial hawkish shift amid a booming economy and signs of persistent inflation. The protocols may paint a more nuanced picture than the dollar-positive narrative emerging from the event held three weeks ago. 

FOMC June Minutes Preview: A view of the Jackson Hole agenda

EUR/USD is trading on the lower ground after disappointing German Industrial Production dropped by 0.3%, worse than expected. Mixed figures from Germany's ZEW institution weighed on the common currency. The focus on Wednesday is on the European Commission's updated economic forecasts. An upgrade is likely, despite the spread of the Delta variant of coronavirus. 

The European Central Bank's strategic review meeting is underway, with potential changes to the Frankfurt-based institution's inflation targeting among others.

See ECB Special Meeting Preview: Three potential EUR/USD movers to watch

GBP/USD has been battling with 1.38 despite the British government's insistence to scrap almost all covid-related restrictions on July 19. A dovish Bank of England and Brexit acrimony are weighing on sterling. 

Lower Treasury yields have kept gold above $1,800, yet the rally somewhat stalled. XAU/USD peaked at $1,814 on Tuesday. 

WTI Crude Oil is trading around $73, below the highs. Earlier this week, a row between Saudi Arabia and the UAE resulted in a collapse of OPEC+ talks. The group will, thus, refrain from raising its output. USD/CAD is trading above 1.24 amid oil's ebb and flow and ahead of the release of Canada's Ivey PMI.

Cryptocurrencies have been edging higher, albeit in tighter ranges. Bitcoin is hovering around $35,000 and Ethereum is marching toward $2,400. Shiba INU has a promising potential:

More Shiba Inu prints bullish pattern, SHIB to rally by 80%

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