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Forex Today: US Dollar rises as Gulf tensions lift, Oil and Canadian inflation cool

Here is what you need to know for Tuesday, July 21:

The US Dollar Index (DXY) rises around 0.2% toward 101.00 as higher United States (US) Treasury yields and escalating tensions in the Middle East support the Greenback. The benchmark 10-year Treasury yield advances toward 4.60% as higher energy prices revive concerns that inflation could remain elevated. However, cooler recent US inflation figures have reduced expectations of a Federal Reserve (Fed) rate increase in July, limiting the US Dollar’s advance.

The United States and Iran continued exchanging attacks, while Yemen’s Iran-aligned Ansar Allah announced a naval blockade against Saudi Arabia. The developments increased concerns about Gulf and Red Sea shipping, global energy supplies and regional water infrastructure. Diplomatic contacts remain active, although no concrete ceasefire agreement has been announced.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD0.21%0.11%0.06%0.32%-0.25%0.00%0.35%
EUR-0.21%-0.07%-0.15%0.09%-0.46%-0.22%0.14%
GBP-0.11%0.07%-0.07%0.18%-0.39%-0.13%0.19%
JPY-0.06%0.15%0.07%0.27%-0.30%-0.00%0.28%
CAD-0.32%-0.09%-0.18%-0.27%-0.56%-0.28%0.00%
AUD0.25%0.46%0.39%0.30%0.56%0.28%0.61%
NZD-0.01%0.22%0.13%0.00%0.28%-0.28%0.30%
CHF-0.35%-0.14%-0.19%-0.28%-0.01%-0.61%-0.30%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

EUR/USD falls around 0.2% toward 1.1410 as broad US Dollar demand weighs on the Euro. On Tuesday, investors will monitor the European Central Bank’s Bank Lending Survey and the ZEW indicators. German Economic Sentiment is expected to improve to 18 from 10.5, while the Current Situation measure is forecast to rise to -77.8 from -81. Eurozone Economic Sentiment for July is expected at 11.5, up from 9.5. ECB policymaker Joachim Nagel is also scheduled to speak.

GBP/USD declines around 0.1% toward 1.3430. The Pound struggles against the stronger Greenback as investors await a busy UK labor market report. Average Earnings Excluding Bonuses are expected to remain at 3.4% in the three months to May, while earnings including bonuses are forecast to rise to 4.5% from 4.4%. The Claimant Count is expected to increase by 28.3K in June, compared with 31.2K previously, while the ILO Unemployment Rate is forecast to rise to 5.0% from 4.9%.

USD/JPY edges around 0.1% higher toward 162.50 as rising US yields keep the Japanese Yen under pressure. Japan’s June trade report will be released during Tuesday’s Asian session. Exports are expected to rise 18.6% YoY, accelerating from 16.8%, while imports are forecast to increase 21.0% after the previous 12.5% gain. The total trade deficit is expected to narrow to ¥120 billion from ¥391.8 billion.

AUD/USD rises around 0.2% toward 0.7000 despite the stronger US Dollar. The Australian Dollar remains supported after the People’s Bank of China kept its one-year and five-year Loan Prime Rates unchanged at 3.00% and 3.50%, respectively. The widely expected decision maintained stable financing conditions in Australia’s largest trading partner.

USD/CAD advances around 0.3% toward 1.4070 as softer Canadian inflation weighs on the Canadian Dollar. Canada’s Consumer Price Index fell 0.4% MoM in June, compared with expectations for a 0.2% decline, while annual inflation slowed to 2.8% from 3.2%, below the 2.9% forecast. The figures reduced expectations of further Bank of Canada tightening and outweighed support from higher crude prices.

West Texas Intermediate (WTI) Oil gained around 0.6% toward $83.00 per barrel. Prices benefit from concerns that the widening US-Iran conflict and Ansar Allah's threat against Saudi shipping could cause further disruptions to global Oil flows. Hopes for renewed diplomatic negotiations are preventing a larger advance.

Gold falls around 0.2% toward $4,008 per troy ounce. The precious metal receives some support from geopolitical uncertainty, but the stronger US Dollar and rising Treasury yields increase the opportunity cost of holding non-yielding Bullion.

Attention during the US session will turn to the preliminary ADP Employment Change four-week average. No market forecast is currently available, while the previous reading stood at 19.75K. A weaker figure could reinforce signs of cooling private hiring and weigh on the Greenback, while an improvement may support US yields and the Dollar.

Author

Agustin Wazne

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

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