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Forex Today: The Dollar Continues to Decline as Sentiment Rises

Forex Today: The Dollar Continues to Decline as Sentiment Rises

Markets are still risk-positive at the start of the week, and demand for the dollar is weak. With US stock index futures increasing by about 1%, the US Dollar Index (DXY), which fell by 0.6 percent on Friday, continues to struggle. There won't be any significant data releases in the European economic calendar on Monday. The NAHB Housing Market Index from the US will be examined for fresh inspiration later in the session.

According to data released by the University of Michigan on Friday, the Consumer Confidence Index increased slightly from 49.9 to 51.5 in the July flash estimate. More significantly, the survey's component measuring long-term inflation expectations fell from 3.1 percent in June's final print to 2.8 percent. Following the release of these data, the likelihood of a rate increase of 100 basis points in July fell to just 30% from over 90% earlier in the week.

Raphael Bostic, president of the Atlanta Fed, commented on the rating outlook and warned against increasing "too dramatically" as it could jeopardize the economy's strengths. In the meantime, the Wall Street Journal claimed that Fed policymakers were getting ready to increase the policy rate by 75 basis points at the forthcoming meeting over the weekend.

The EUR/USD pair lost ground for the third consecutive week, although Friday's recovery partially allowed it to recover those losses. As of the time of writing, the pair was moving closer to 1.0150.

New Zealand data showed that the Consumer Price Index increased from 6.9 percent to 7.3 percent annually in the second quarter. This reading exceeded the market's prediction of 7.1 percent. Following this data, the NZD/USD pair gained momentum and began to climb toward 0.6200.

Early on Friday, GBP/USD could extend its rebound gains from the previous day and be last seen trading at its highest point in five days, close to 1.1950.

Gold experienced significant losses and recorded its weakest weekly close in almost a year. Early Monday, gold gained recovery momentum and soared to around $1,720 thanks to widespread dollar weakening.

Early Monday, Bitcoin takes advantage of the risk flows and trades close to the top of its one-month-old range, about $22,000. Daily, Ethereum has increased by more than 8% on Monday and is still climbing toward $1,500.

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