Dollar Stalls Ahead of NFP and CPI Reports Amid Iran Deal Hopes
The US dollar's decline has slowed ahead of the crucial NFP and CPI reports. The greenback weakened across the board this week due to decreased tensions in the Middle East and increased hopes for a US-Iran deal, but this momentum is expected to wane without an announcement on the timeline.
While the Iran deal will likely keep the dollar under pressure unless there's another escalation, the next major event will be the US CPI report. A hot inflation reading could trigger a rally in the dollar and boost rate hike bets, while a soft report would reduce the risk of Fed tightening and put more pressure on the greenback.
The EUR/USD is currently consolidating near a key trendline on its daily chart, with buyers waiting for a breakout to increase bullish bets. The European Central Bank left interest rates unchanged at its last meeting but hinted at a potential rate hike in September if inflation worsens.