Global currency volatility has continued to drop rapidly as markets await developments on eurozone and US politics, as well as on the data side. The proximity to Thursday’s pivotal CPI release in the US may also be behind this week’s cautious trading in FX, ING’s FX strategist Francesco Pesole notes.
US Dollar to remain flat ahead of Thursday’s CPI report
“Today, Federal Reserve Chair Jerome Powell faces House policymakers for his second testimony, after yesterday’s Senate appearance had few repercussions on markets. Powell’s prepared remarks focused on two-way risks, reiterating the need for more data input to justify monetary easing. So, more of the same rhetoric from Powell, who’s happy with keeping markets relatively quiet.”
“The US Democratic Party revolt against President Joe Biden appears to have been fully sidelined by markets. Predict index of Biden’s probability of being the party's candidate in November has bounced back from 40% to 60% after recent signs that the internal push to replace him may indeed be insufficient.”
“We expect FX volatility to remain low today, a development that can favour an additional short-term recovery in high carry currencies like MXN and BRL, while keeping the pressure high on the funding yen. The dollar may remain broadly flat into tomorrow’s CPI.”
(This story was corrected on July 10 at 12:02 GMT to say "ahead of Thursday's CPI report", not Friday's).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD tumbles to a five-year low below 0.6000 amid US-China tariffs war
The AUD/USD pair tumbles to near 0.5985 for the first time since the COVID-19 pandemic during the early Asian session on Monday. The Australian Dollar weakens as China slapped a 34% tax on all US imports in retaliation for US President Donald Trump’s tariffs, raising fear of a trade war between the United States and China.
USD/JPY hangs near a multi-month low; holds above 145.00 amid mixed cues
USD/JPY kicks off the new week on a weaker note, though it manages to hold above the 145.00 mark. The global carnage, amid the mounting risk of a recession led by Trump's sweeping tariffs, underpins the safe-haven JPY and weighs on the currency pair amid a bearish USD.
Gold correction deepens after new record-high is set on Trump’s tariff announcement
Gold pushed higher with the initial reaction to tariff announcements from the United States on Wednesday and touched a record peak of $3,167 before staging a deep correction heading into the weekend. Investors will stay focused on tariff-related headlines and pay close attention to inflation data from the US.
Week ahead: US CPI and RBNZ decision on tap amidst tariff mayhem
US Dollar traders await US CPI data amid global trade turbulence. RBNZ to cut by 25bps, could maintain dovish stance. China’s CPI and PPI to reveal tariff impact on inflation. Strong UK GDP data could help the pound climb higher.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.