Forex Today: US Dollar rises as strong labor data and Middle East tensions lift Oil

Here is what you need to know for Friday, July 24:

The US Dollar strengthened across the board on Thursday as resilient United States labor data and escalating hostilities in the Middle East support demand for the Greenback. Initial Jobless Claims fell to 187K in the week ending July 18, sharply below the 212K forecast and the revised 209K previous reading. This was the lowest level since 1969, reinforcing expectations that the Federal Reserve could maintain restrictive monetary policy for longer.

Market sentiment also deteriorated after US President Donald Trump said he was close to deciding whether to launch a larger military operation against Iran. Oil prices surged following attacks on Saudi tankers in the Red Sea and concerns that disruptions could affect both the Bab el-Mandeb Strait and the Strait of Hormuz.

The US Dollar Index (DXY) rises around 0.3% above 101.40, supported by stronger Treasury yields, geopolitical uncertainty, and expectations that higher energy costs could keep inflation elevated.

EUR/USD trades lower near 1.1380, losing around 0.3%. The European Central Bank kept its three key interest rates unchanged, as expected, while maintaining a data-dependent approach and leaving the possibility of further tightening open if energy-driven inflation pressures persist. However, the decision failed to provide lasting support to the Euro as broad USD demand dominated market action.

GBP/USD falls below1.3320, declining around 0.4% as the Pound struggles against the stronger Greenback. Investors are also cautious ahead of Friday’s UK Retail Sales report. Monthly sales are expected to decline 0.3% in June following May’s 1.2% increase, while sales excluding fuel are forecast to contract 0.4%.

USD/JPY climbs toward 163.85, advancing around 0.4% and reaching its highest level in almost four decades. The Yen remains under pressure as rising US yields and stronger Fed rate hike expectations widen the monetary policy contrast between the United States and Japan. The sharp move is also keeping markets alert to the possibility of intervention from Japanese authorities.

AUD/USD trades lower near 0.6970, falling around 0.4% despite Australia’s stronger-than-expected employment report. Employment increased by 76.3K in June, well above the 15K forecast, while the Unemployment Rate remained unchanged at 4.4%. Nevertheless, safe-haven USD demand and cautious risk sentiment outweighed support from the domestic figures. Australia’s preliminary July PMIs are due after the Composite PMIs, which previously stood at 50.4.

West Texas Intermediate (WTI) Oil surges more than 6% toward $92.00 per barrel as geopolitical tensions raise concerns about global energy supplies. The Ansar Allah attacks on Saudi tankers opened another potential disruption point in the Red Sea, while reduced traffic through the Strait of Hormuz continues to tighten supply expectations.

Gold drops approximately 2% toward $4,050, retreating from its recent highs despite geopolitical uncertainty. The stronger US Dollar, rising Treasury yields and expectations that higher Oil prices could force central banks to maintain elevated interest rates are weighing on the non-yielding metal.

Friday’s economic calendar

On Friday, Germany’s GfK Consumer Confidence is expected to improve to −28.5 from −29.2. France, Germany and the Eurozone will release their preliminary July HCOB PMIs, with Eurozone Manufacturing expected at 51.3 and Services at 49.8.

The UK will publish Retail Sales and preliminary S&P Global PMIs. The United States will also release its preliminary July PMIs, with Manufacturing expected to rise to 54.5 from 53.9 and Services forecast to ease to 51.0 from 51.2. June New Home Sales will also be published on Friday.