Forex Today: Rate cut expectations eye US inflation data

Increased optimism in the risk-related complex kept the dollar under pressure in the first half of the week, as investors prepared for the release of crucial US inflation figures on Wednesday. Still on the inflation front, UK CPI will also be in focus.

Here’s what you need to know on Wednesday, August 14:

The USD Index (DXY) retreated for the third consecutive day and once again broke below the 103.00 support amid lower yields. The inflation rate will be in focus on August 14, followed by the weekly MBA mortgage applications.

EUR/USD rose to multi-day highs and revisited the 1.0980 area on the back of improved tone in riskier assets. Another estimate of the second quarter GDP growth rate in the Eurozone will be released on August 14, followed by industrial production and preliminary employment change in the second quarter.

GBP/USD resumed its uptrend and rose sharply, this time quickly leaving behind the 1.2800 barrier to reach multi-day highs. The highlight event on the other side of the Channel will be the inflation rate on August 14.

USD/JPY maintained its erratic behavior seen in previous days, although a convincing break of the 148.00 barrier seems elusive for the moment. The next significant data releases in Japan will be the second quarter advanced GDP growth rate, final industrial production and weekly foreign bond investment, all scheduled for August 15.

Another positive day saw AUD/USD break the key 0.6600 barrier and hit fresh three-week highs. Next up on the Australian calendar will be consumer inflation expectations and the release of the labour market report, all scheduled for August 15.

WTI prices failed to sustain a move beyond the key $80.00 per barrel level, eventually succumbing to renewed selling pressure and returning below the $79.00 level.

Gold prices approached the $2,480 per troy ounce region before retreating and ending the session with modest losses ahead of US CPI data on Wednesday. Silver fell noticeably despite briefly breaching the $28.00 per ounce level earlier in the day.