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US dollar finds stability following a week of volatility

Daily Currency Update

The US dollar index (DXY) stabilized this morning around the 102 mark, following a period of increased volatility last week. Investors are preparing for the release of US inflation data this week, which will influence both economic and monetary policy expectations. The US consumer price index (CPI) report is scheduled for release on Thursday, and the producer price index (PPI) report will follow the next day. Last Friday, it was reported that the US economy added 187,000 jobs in July, slightly below the market's expectation of a 200,000 increase. However, the unemployment rate unexpectedly declined to 3.5%, and wage growth slowed. Despite these figures, the dollar has maintained a more than a 2% increase since mid-July, supported by signs of economic resilience in the US and expectations that the Federal Reserve will maintain a restrictive monetary policy for the time being. The dollar remained relatively stable against most major currencies but fell slightly against the Australian and New Zealand dollars.

Key Movers

The EUR/USD pair experienced a slight recovery after dipping below 1.0970 earlier in the trading session however, its momentum wavered before reaching 1.1000. With no significant macroeconomic data scheduled for release today in the Eurozone region, cautious market sentiment is hindering the pair from gaining any traction.

The sterling plunged to around 1.2700 against the US dollar in the early European session but later rebounded, reaching the 1.2750 level as it wiped out its losses for the day. Market participants will be closely monitoring any comments made by central bankers following the release of significant data releases this week from the US and UK.

Expected Ranges

  • EUR/USD: 1.0966 - 1.1019 ▲
  • GBP/USD: 1.2718 - 1.2783 ▲
  • AUD/USD: 0.6556 - 0.6593 ▼
  • USD/CAD: 1.3357 - 1.3396 ▼