Forex Today: US Dollar eases ahead of Fed as Oil and Gold extend losses

Agustin Wazne FXStreet

Here is what you need to know for Wednesday, July 29:

The US Dollar (USD) trades slightly lower on Tuesday as investors reduce some exposure ahead of Wednesday’s Federal Reserve (Fed) monetary policy announcement. The Greenback remains close to its recent monthly high, however, as markets continue to consider the possibility of a surprise interest rate increase. Softer US Consumer Confidence data also limits demand for the currency.

The US Dollar Index (DXY) falls around 0.1% and trades near 101.40. The Fed is generally expected to maintain the fed funds target range at 3.50%–3.75%, although markets assign close to a 40% probability of a 25-basis-point increase. Investors will focus on the policy statement and Chair Kevin Warsh’s press conference for signals regarding a possible September move.

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 Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.17%	0.00%	0.07%	-0.09%	0.22%	-0.24%	-0.02%
EUR	0.17%		0.18%	0.24%	0.06%	0.39%	-0.04%	0.16%
GBP	-0.01%	-0.18%		0.07%	-0.08%	0.23%	-0.22%	0.00%
JPY	-0.07%	-0.24%	-0.07%		-0.17%	0.14%	-0.29%	-0.07%
CAD	0.09%	-0.06%	0.08%	0.17%		0.33%	-0.14%	0.10%
AUD	-0.22%	-0.39%	-0.23%	-0.14%	-0.33%		-0.43%	-0.23%
NZD	0.24%	0.04%	0.22%	0.29%	0.14%	0.43%		0.23%
CHF	0.02%	-0.16%	-0.01%	0.07%	-0.10%	0.23%	-0.23%

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 rises around 0.2% and trades near 1.1390, benefiting from the modest retreat in the US Dollar. The pair remains below 1.1400 as investors avoid taking large positions ahead of the Fed decision.

GBP/USD holds marginally higher near 1.3290. Sterling’s movement remains limited as traders await the Fed before turning their attention to the Bank of England’s monetary policy announcement later in the week. The BoE is broadly expected to leave interest rates unchanged.

USD/JPY edges higher toward 163.84, keeping the Japanese Yen close to multi-decade lows. Elevated US Treasury yields and expectations that the Fed will retain a hawkish stance continue to support the pair. Japanese authorities remain alert to excessive currency movements as the Yen approaches levels that could increase the risk of intervention.

AUD/USD falls around 0.2% and trades close to 0.6975 as investors prepare for Australian inflation figures. Headline Consumer Price Index inflation is expected to rebound by 0.2% MoM in June after falling 0.7% previously, while the annual rate is forecast to remain at 4.0%. Trimmed Mean CPI is expected to rise 0.4% MoM, matching the previous increase. A hotter report could strengthen expectations of another Reserve Bank of Australia rate hike.

West Texas Intermediate (WTI) Oil tumbles more than 3.5% and trades near $79 per barrel, reaching its lowest area in over a week. Crude prices remain under pressure as the pause in US-Iran military strikes raises cautious hopes that diplomatic efforts could reduce supply risks in the Middle East.

Gold declines around 1.2% and trades near $4,027 per troy ounce. The non-yielding metal remains pressured by elevated Treasury yields and expectations that the Fed could maintain restrictive monetary policy for longer, despite the modest daily decline in the US Dollar.

Wednesday’s economic calendar

Australia will publish June headline and Trimmed Mean CPI figures, which could influence expectations surrounding the RBA’s next policy move. Switzerland will release the ZEW Expectations Survey, while the Bank of Canada will publish its Summary of Deliberations.

The main event will be the Federal Reserve’s interest rate decision and Kevin Warsh’s press conference. A surprise hike or clearly hawkish guidance could strengthen the US Dollar, while an unchanged decision accompanied by cautious commentary could trigger a deeper correction in the Greenback.

Author

Agustin Wazne

FXStreet

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

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