Forex Today: PMIs draw attention amid expectations of a steady hand from the ECB

President Trump's announcement of a trade deal between the US and Japan and prospects of a potential US-EU agreement weighed on the US Dollar (USD), which added to the persistent ongoing weakness.

Here's what to watch on Thursday, July 24:

The US Dollar Index (DXY) dropped modestly and revisited the 97.20 zone in a vacillating fashion near the 97.50 zone as traders assessed the recent improvement on the trade front. Focus is expected to be on the weekly Initial Jobless Claims, seconded by the release of flash S&P Global Manufacturing and Services PMIs, New Home Sales, and the Chicago Fed National Activity Index.

EUR/USD charted decent gains and flirted with two-week tops around 1.1770 amid rising trade optimism. The ECB takes centre stage and is widely anticipated to leave its policy rates unchanged, while the release of flash HCOB Manufacturing and Services PMIs will also grab attention.

The upbeat tone around the British Pound remained well in place, lifting GBP/USD to multi-day peaks near 1.3580. The preliminary S&P Global Manufacturing and Services PMIs will be in the spotlight, followed by the CBI Business Optimism Index and the CBI Industrial Trends Orders.

USD/JPY clinched its third consecutive daily retracement, approaching the key 146.00 support following the announcement of the US-Japan trade deal. The advanced Jibun Bank Manufacturing and Services PMIs are scheduled for Thursday on the Japanese docket.

Finally, AUD/USD hit the 0.6600 mark for the first time since early November 2024, as sentiment was propped up after the US and Japan secured a trade agreement. The flash S&P Global Manufacturing and Services PMIs are expected in Oz.

Prices of the american WTI maintained the multi-day negative streak in place on Wednesday, slipping back below the $65.00 mark per barrel once again as traders remained concerned of mounting trade fears ahead of the August 1 deadline, while also assessing lower-than-expected US crude oil stocks during the last week.

Gold prices halted their three-day recovery on Wednesday, returning to the sub-$3,400 zone per troy ounce on the back of some easing of trade uncertainty following the US-Japan deal and prospects of a US-EU agreement. Silver prices rose to fresh tops around $39.50 per ounce, although they surrendered most of that advance as the day progressed.