Market Drivers; US Session: Focus on US Data, Potential Rate Cuts

US Dollar Dives on Soft US Inflation: The US Dollar Index (DXY) plunged to multi-week lows around 104.00 after disappointing Consumer Price Index (CPI) data and falling US yields. This data fueled speculation of the Federal Reserve cutting interest rates as early as September, sending the Dollar tumbling. Today (July 12th), key data releases include US Producer Prices and the preliminary Michigan Consumer Sentiment index, which will be closely watched for further clues about inflation and the Fed’s monetary policy.

Euro Eyes Fresh Highs: The Euro (EUR) capitalized on the Dollar’s weakness, briefly retesting the 1.0900 level against the USD before retreating slightly. German data on Wholesale Prices and the Current Account is on tap for today.
Pound Rallies to Year Highs: The British Pound (GBP) surged to its highest level in a year, nearing 1.2950 against the USD, riding the wave of the Dollar sell-off. No major economic releases are scheduled from the UK today.

Yen Holds Firm as Japan Intervenes: The Japanese Yen (JPY) weakened against the USD, approaching the 157.00 level, despite suspected intervention by Japanese authorities to weaken the Yen. Today’s final Industrial Production data from Japan will be released.

Aussie Dollar Extends Gains: The Australian Dollar (AUD) continued its monthly rise, climbing close to the 0.6800 mark against the USD. No economic data is expected from Australia today.

Oil Up on Rate Cut Hopes: Weakening Dollar and speculation about Fed rate cuts boosted the price of West Texas Intermediate (WTI) crude oil, building on Wednesday’s gains and surpassing $83.00 per barrel.

Gold Shines as Yields Dip: Gold prices surged significantly, exceeding $2,420 per ounce, as the Dollar weakened, yields fell, and bets on rate cuts increased. Silver followed suit, rising to near six-week highs around $32.00 per ounce.

Also Read:

Fed’s Goolsbee: CPI data indicate inflation on 2% path

Japan’s Kanda: Recent Japanese Yen moves are somewhat rapid

EUR/USD follows market-wide rally after US CPI

Gold, BTC, GBP: Analytical Look on Week’s Performance, Future Outlook

US bond yields decline on interest rate cut hopes

Fed’s Musalem: CPI data points to encouraging further progress

US inflation continues to retreat

Fed’s Daly: One or two rate cuts this year would be more or less the appropriate path