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The US Dollar weakened further on Tuesday, July 22, 2025, dropping to two-week lows around 97.30 as risk sentiment improved despite ongoing trade uncertainties and heightened Trump-Powell tensions. This shift raises a key question—will these dynamics continue to shape currency and commodity movements into Wednesday, July 23? Here’s what to watch.
Dollar Slides Amid Mixed Signals
The US Dollar Index (DXY) fell to its lowest in two weeks near 97.30, pressured by declining US yields across the yield curve and persistent trade concerns. Wednesday’s economic calendar features MBA Mortgage Applications, Existing Home Sales, and the EIA’s weekly US crude oil inventory report, which could sway the Dollar’s trajectory. The Greenback’s retreat has rippled through forex markets, boosting other currencies.
Euro and Pound Gain Ground
EUR/USD climbed for the third straight day, reaching two-week highs above 1.1700, fueled by the Dollar’s decline. The spotlight shifts to the euro area’s preliminary Consumer Confidence data on Wednesday. Meanwhile, GBP/USD broke through 1.3500, building on Monday’s gains, with the US Dollar’s weakness driving the move. Key UK data, including S&P Global Manufacturing and Services PMIs, is slated for Thursday, July 24.
Yen and Aussie Follow Suit
USD/JPY slid to two-week lows near 146.30, extending Monday’s downturn as the Dollar and US yields retreated. Bank of Japan’s Uchida is scheduled to speak, potentially offering insights. AUD/USD held its rebound, nearing 0.6560, with the Westpac Leading Index due as the lone Australian release on Wednesday.
Commodities Reflect Uncertainty
Crude oil prices continued their downward trend, with WTI dipping below $65.00 per barrel, as traders brace for trade risks ahead of the August 1 deadline. Gold, however, surged past $3,400 per troy ounce, hitting five-week highs, supported by a softer Dollar, falling US yields, and trade jitters. Silver also rose, reaching $39.20 per ounce—its highest since September 2011—mirroring gold’s safe-haven appeal.
Market Outlook
The Dollar’s slide and commodity shifts highlight trade tensions and Fed independence debates, with Trump’s criticism of Powell amplifying uncertainty. Wednesday’s data and upcoming events, like the Fed’s July 30 decision blackout, will be critical. Will risk appetite hold, or will safe-haven assets like gold dominate as trade deadlines loom?
