Dollar Holds Steady Ahead of PCE Release Amid Global Trade Tensions
The US Dollar has extended its consolidation ahead of key inflation data releases and Nvidia earnings. Major currency pairs are trading in relatively tight weekly ranges, waiting for the US Bureau of Economic Analysis (BEA) to publish its second estimate for the second-quarter Gross Domestic Product (GDP) growth and Personal Consumption Expenditures (PCE) Price Index. The Federal Reserve's preferred gauge of inflation is expected to rise 0.2% on a monthly basis in July, with an annual rate holding steady at 3.3%. Analysts at ING expect the Dollar to remain stable around the upcoming US core PCE release.
The Strait of Hormuz remains closed despite a joint proposal between Iran and Oman to establish a temporary shipping lane. The agreement comes after West Texas Intermediate (WTI) fell more than 4% on Tuesday, trading near $79.50. Canada has announced retaliatory tariffs against the US, with measures as high as 50% on certain goods.
The AUD/USD pair has gained bullish momentum and trades at its highest level since early June above 0.7180. The EUR/USD and GBP/USD pairs are trading sideways and struggling to make decisive moves. Gold touched its highest level in over three months near $4,700 but lost traction on Tuesday.