Market Report: Dollar Holds Steady Ahead of Key US Inflation Readings

Dollar movement is front and center this week as markets await the July inflation report, with attention also on a pending US/China tariff deadline. The index is holding firm around 98.2, but uncertainty is on the rise.

US Dollar Poised for Volatility

The US dollar remains stable just after last week’s drop. The market is watching this week’s inflation data closely. Strong retail prices could stall expectations for a September rate cut. At the same time, a looming tariff deadline with China may add pressure if negotiations take a tougher tone. Overall, dollar traders are keeping one foot on the brake while they assess incoming signals.

Euro Holds Its Ground as Growth Concerns Linger

The euro has held steady in recent days. Its near-term strength is being tested by lingering worries about weak growth across the eurozone. Analysts expect EUR/USD to consolidate in the mid-1.10s to low-1.17s, with signs of renewed strength possibly emerging later in the year. However, any soft data or cautious ECB commentary could limit upside for now.

Pound Edges Higher Ahead of Bank of England Decision

Sterling has gained slightly, buoyed by growing confidence that the Bank of England will proceed with a 25-basis-point rate cut. Yet markets remain cautious. Inflation is still well above target, growth is sluggish, and UK fiscal uncertainties persist. This week’s data on jobs and sentiment could easily sway the pound’s direction.

The dollar’s stability this week masks significant uncertainty. US inflation, trade tensions, ECB signals, and UK data all have the potential to reset currency momentum sharply. Markets are poised for twists, and any surprise could quickly rewrite forecasts.

Market Report by Sam Balla-Muir