Dollar Resilience Ahead of Fed Meeting Amid Oil Price Volatility

The US Dollar (USD) has shown resilience ahead of the Federal Reserve's monetary policy meeting on Tuesday, July 28. Despite losing about 9% in oil prices on Monday, the barrel of West Texas Intermediate (WTI) remained relatively quiet early Tuesday and traded modestly lower at around $83.50.

However, market participants are still cautious ahead of the Fed meeting, with strategists at Deutsche Bank noting that US equities 'rallied at the open on the retreat in oil prices' but later 'whipsawed lower after chip stocks sold off.'

The EUR/USD pair turned south in the second half of the day on Monday and stayed quiet in the European morning, moving sideways below 1.1400. Meanwhile, the USD/JPY declined below 163.50 in the European session on Monday but staged a rebound in the second half of the day.

Reserve Bank of Australia (RBA) Governor Michele Bullock said that they remain ready to raise the policy rate if needed and added that the underlying inflation is still too high despite evolving as expected. AUD/USD stays on the back foot early Tuesday, trading below 0.7000.