Softer Inflation Eases Fed Rate Hike Expectations

Softer-than-expected US inflation data has led market participants to reduce bets on a Federal Reserve interest rate hike for September, a sentiment echoed by Chicago Fed President Austan Goolsbee. This easing of monetary policy expectations supported gold prices, which were reported trading above $4,360. The cooling inflation figures also contributed to a decline in Canadian bond yields and a general weakening of the US Dollar against major currencies. fxstreet +7

Geopolitical and Trade Tensions Increase

The US is reportedly preparing to implement "unprecedented measures" on Iran, according to the Treasury Secretary, adding to geopolitical uncertainty. In trade developments, the Trump administration has imposed sweeping tariffs on foreign drone imports. This action prompted Brazil to initiate a reciprocity process against the United States. fxstreet +2

US Dollar Weakens Across Forex Markets

The US Dollar lost momentum against a basket of major currencies as softer domestic inflation data curbed Fed rate hike bets. The Euro held firm and the British Pound was steady, while the Australian and New Zealand dollars recovered from recent lows. Meanwhile, the USD/JPY pair remained in a tight range as traders weighed caution over potential Japanese currency intervention. fxstreet +5