Forex Today: US Dollar softens as Oil plunges on Middle East pause

Agustin Wazne FXStreet

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

The US Dollar (USD) traded mostly unchanged on Monday as a temporary pause in hostilities between the United States and Iran reduces demand for safe-haven assets. The US Dollar Index (DXY) traded lower earlier in the session but moved closed to breakeven by the late American afternoon. The war triggered a sharp decline in Oil prices, eased energy-driven inflation concerns, and supported risk-sensitive currencies ahead of a busy week of central bank decisions.

The US Dollar Index (DXY) fell slightly toward 101.40 as investors prepare for the Federal Reserve’s (Fed) two-day monetary-policy meeting. Markets largely expect the Fed to maintain its target range at 3.50%–3.75%, although the possibility of an interest rate increase remains in focus due to persistent inflation concerns.

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 British Pound.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.02%	0.24%	-0.08%	0.21%	-0.17%	0.17%	0.10%
EUR	0.02%		0.21%	-0.06%	0.20%	-0.16%	0.21%	0.11%
GBP	-0.24%	-0.21%		-0.28%	-0.02%	-0.37%	-0.05%	-0.11%
JPY	0.08%	0.06%	0.28%		0.25%	-0.09%	0.25%	0.19%
CAD	-0.21%	-0.20%	0.02%	-0.25%		-0.35%	-0.01%	-0.08%
AUD	0.17%	0.16%	0.37%	0.09%	0.35%		0.36%	0.26%
NZD	-0.17%	-0.21%	0.05%	-0.25%	0.01%	-0.36%		-0.10%
CHF	-0.10%	-0.11%	0.11%	-0.19%	0.08%	-0.26%	0.10%

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 trades largely unchanged near 1.1370. Investors remain cautious ahead of preliminary second-quarter Gross Domestic Product data from Germany and the Eurozone, alongside Germany’s preliminary July inflation report later in the week.

GBP/USD loses ground near 1.3300. The Pound Sterling remains under pressure ahead of the Bank of England’s policy decision, with the central bank expected to leave interest rates unchanged while continuing to assess inflation risks related to energy prices.

USD/JPY trades lower near 163.70 as the Japanese Yen benefits from falling Oil prices and modest USD weakness. However, the pair remains close to multi-decade highs ahead of the Bank of Japan’s meeting. The BoJ is expected to keep rates unchanged but could signal that additional tightening remains possible if Yen weakness continues to raise inflationary pressure.

AUD/USD rises toward 0.6990 as improving market sentiment supports the risk-sensitive Australian Dollar. Attention turns to Reserve Bank of Australia Governor Michele Bullock’s speech on Tuesday, followed by Australia’s inflation data on Wednesday. Stronger inflation could reinforce expectations that the RBA will maintain a restrictive monetary policy stance.

West Texas Intermediate (WTI) Oil plunges more than 7% to approximately $82.30 per barrel after the US temporarily halted its strikes against Iran and Tehran indicated that it would pause retaliatory attacks while the US suspension remained in place. The developments raised hopes of diplomatic progress and reduced immediate concerns about supply disruptions through the Strait of Hormuz.

Gold advances around 0.7% toward $4,081 despite easing geopolitical tensions. Lower US Treasury yields and uncertainty surrounding this week’s central-bank decisions provide support to the non-yielding precious metal.

On Tuesday, RBA Governor Bullock is scheduled to speak. The US economic calendar will feature the ADP Employment Change four-week average, previously at 16.5K, the May Housing Price Index, expected to rise 0.2% after declining 0.1%, and July Consumer Confidence. Germany’s Bundesbank Monthly Report will also be published.

Author

Agustin Wazne

FXStreet

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

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