Insights & Updates

Annual inflation in the United States (US), as measured by the change in the Consumer Price Index (CPI), declined to 3.4% in July from 3.5% in June, the US Bureau of Labor Statistics (BLS) reported on Wednesday. This print came in line with the market expectation.

Gold (XAU/USD) extends gains above $4,400 on Wednesday as traders digest US inflation data, which came broadly in line with expectations. At the time of writing, XAU/USD trades around $4,429, up 1.38% on the day.

The Japanese Yen (JPY) continues to navigate complex market dynamics, consolidating near the 159.25 level against the US Dollar (USD) following a sharp upward push.

The US Dollar (USD) reflects a sideways performance against its peers ahead of the United States (US) Consumer Price Index (CPI) data is scheduled to be published at 12:30 GMT.

NZD/USD extends its decline for a third consecutive day on Wednesday and trades around 0.5860 at the time of writing, down 0.28% on the day.

BNY’s Wee Khoon Chong highlights that institutional investors bought Dollar and sold Japanese Yen after the June BoJ hike, and again following late-July joint intervention to weaken USD/JPY. Despite official action, real money treated the move as a USD/JPY buying opportunity.

ING’s Chris Turner expects US July CPI to be the key driver for the Federal Reserve’s next move, with consensus looking for subdued headline and core readings that edge closer to the 2% target.

MUFG’s Michael Wan reports the Reserve Bank of Australia kept its policy rate at 4.35% in a unanimous decision. AUD/USD initially dipped on the statement but later rebounded as Governor Bullock reiterated hawkish inflation concerns.

The International Energy Agency (IEA) cut its global Oil supply and demand forecasts for 2026 amid shipping disruptions in the Middle East.

EUR/USD trades around 1.1550 on Wednesday at the time of writing, up a modest 0.08% on the day.

National Bank of Canada's (NBC) Jocelyn Paquet analyzes how China’s sharp reduction in petroleum imports helped offset the Middle East supply shock and limit Oil price gains. The July rebound in Chinese imports is highlighted as historically large in percentage terms.

Rabobank's Senior FX Strategist Jane Foley reviews recent United Kingdom (UK) data against Eurozone performance. Foley notes Eurozone Q2 Gross Domestic Product (GDP) at 0.4% q/q and a 0.7% UK upturn in the three months to May.

Societe Generale analysts Brendan McKenna and Dev Ashish outline scenarios for Brazil’s 2026 election, assigning a 65% probability to President Lula winning a fourth term and 30% to Flavio.

GBP/USD trades modestly higher on Wednesday as the US Dollar (USD) comes under mild pressure following the release of the latest US inflation figures. However, the market reaction remains limited as the data broadly matched expectations.

USD/CAD trades around 1.3915 on Wednesday at the time of writing, virtually unchanged on the day with a modest decline of 0.06%.

Scotiabank strategists Shaun Osborne and Eric Theoret report the British Pound (GBP) is posting fractional gains versus the US Dollar (USD) and outperforming G10 peers as improving sentiment supports price action.

BNY’s Geoff Yu reports that sovereign bonds from commodity-based EM economies have seen accelerated selling after the Fed decision, despite a weaker Dollar and lower U.S. real yields.

The Euro (EUR) steadies against the Pound Sterling (GBP) on Wednesday, with EUR/GBP trading flat near the 0.8540 zone after two consecutive declines.

United States (US) President Donald Trump used a post on Truth Social to declare that the US has "total control" over the Strait of Hormuz on Wednesday., Trump boasted about the American naval presence near the Persian Gulf, which he described as "a wall of steel".

TD Securities strategists note that July US inflation came in broadly in line with expectations, with headline CPI rising 0.1% m/m and core CPI increasing 0.2% m/m.