Forex Today: Dollar rebound knocks off Gold from record highs, US stimulus talks eyed

Here is what you need to know on Tuesday, July 28:

The US dollar witnessed fresh signs of life on Tuesday, as it staged a solid comeback across its main competitors. The greenback retraced some of its previous declines, helped by the souring sentiment on the Asian equities.

Also, expectations that the US stimulus could be unveiled before the unemployment benefits expire on Friday, aided the dollar recovery ahead of Wednesday’s all-important FOMC decision.

The sharp pullback in the dollar, downed gold nearly $35 from its new record high of $1981.34, as investors took profits off the table after the relentless rise. Coronavirus-led economic concerns, dovish Fed expectations and US-China escalation will continue to benefit the yellow metal.

The US Treasury yields rebounded while S&P 500 futures pared back gains despite the coronavirus vaccine optimism. On Monday, Moderna Inc and Pfizer Inc announced a launch of two 30,000-subject trials of COVID-19 vaccines that could pave the way for the widespread use by the end of this year.

Amid a fresh dollar’s buying-wave, EUR/USD fell from near 1.1770 levels while GBP/USD eased back below 1.2850, uninspired by UK-US trade deal hopes, as Brexit uncertainty continues to loom. USD/JPY recovered in tandem with the greenback, as the bulls regained the 105.50 ahead of the US Consumer Confidence data. 

Commodity-currencies suffered, on the other hand, with NZD/USD losing the most, around 0.6650. AUD/USD faced rejection near 15-month highs of 0.7183 and dropped sharply towards 0.7100 while USD/CAD advanced towards 1.3400, additionally helped by the weakness in WTI.   

Cryptocurrencies consolidated the previous surge, with Bitcoin battling $11K mark.