Forex
US Dollar Faces Pressure from Cooling Economy and High Oil Prices
The US dollar is facing pressure due to a cooling economy and high oil prices. According to Dmitri Demidenko, economic data may allow the Federal Reserve to monitor developments passively without raising interest rates in 2026.
US retail sales declined in July, reducing the need for monetary policy tightening. The US dollar found support from oil prices, which climbed amid a Middle East escalation. Brent crude remained within the $80-$90 per barrel range, creating a bearish backdrop for the US dollar.
The EUR/USD pair surged toward 1.16 after disappointing US economic data releases. However, the rally was hindered by renewed oil price growth. The probability of a Fed rate hike in September decreased to 64%.