US Inflation Data Meets Expectations, Pressuring Dollar and Boosting Silver
US inflation data for July came in line with market expectations, reinforcing analyst views that the Federal Reserve may be inclined to hold interest rates steady at its September meeting. The subdued consumer price index (CPI) readings exerted mild downward pressure on the US Dollar and reduced perceived odds of a near-term rate hike. Consequently, precious metals saw a positive reaction, with silver prices jumping over 2% following the data release, while the response in equity markets was more muted.
Oil Market Supported by Supply Concerns and Demand Outlook
Crude oil prices remained elevated, underpinned by forecasts for tightening global supply and signs of recovering demand. The International Energy Agency (IEA) lowered its global oil supply projections for 2026, citing shipping disruptions, while analysts noted a strong rebound in Chinese petroleum imports is supporting the demand side. Ongoing supply concerns are also being fueled by doubts surrounding a potential US-Iran deal and geopolitical statements regarding control of the Strait of Hormuz.
British Pound Strengthens Amid Broader Forex Stability
The British Pound was a notable outperformer among major currencies, showing resilience and posting gains against the US Dollar. Analysts attributed the Pound's strength to improving market sentiment and recent UK economic data that has shown a relative upturn compared to the Eurozone. While the US inflation report caused some currency fluctuations, the Euro remained relatively steady against both the Pound and the Dollar.
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