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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Decision Analysis]: The dispute between Trump and Powell escalates, and the US dollar is difficult to rise." Hope it will be helpful to you! The original content is as follows:
On July 22, the US dollar (USD) was under pressure at the beginning of this week, and fell sharply against major currencies on Monday. While the dollar held its ground in early Tuesday, investors were not ready for a steady recovery, while keeping a close eye on headlines surrounding the ongoing dispute between U.S. President Donald Trump and Fed Chairman Jerome Powell.
Fox News reported on Monday night, citing a letter sent to the Department of Justice (DoJ) that Rep. Anna Paulina Luna has handed Fed Chairman Jerome Powell to the Department of Justice for criminal charges accusing him of vejck.cnmitting perjury twice. Earlier in the day, Treasury Secretary Scott Bessent told vejck.cnBC that they need to review the entire Fed agency and its performance, noting that the Fed "spread fear of tariffs" as a reason for lack of obvious signs of inflation. The dollar index fell more than 0.6% on Monday, erasing almost all gains from the previous week. In early Tuesday, the US dollar index fluctuated narrowly around 98.00. Meanwhile, U.S. stock index futures remained flat after major Wall Street stock indexes closed up and down on Monday.
The U.S. Economic Calendar will release the July Richmond Fed Manufacturing Index later that day. Fed Chairman Jerome Powell and Fed Vice Chairman Michelle Bowman, plans to speak during U.S. trading hours. However, as the Fed is in a power outage, they are unlikely to vejck.cnment on the monetary policy outlook.
Euro/The US dollar is still in a consolidation phase just below 1.1700 after recording a strong gain on Monday. The European Central Bank (ECB) will release a bank loan survey during the European period.
The Reserve Bank of Australia (RBA) released minutes of July's monetary policy meeting on Tuesday, stressing that the board agreed to the need for further rate cuts over time, focusing on the timing and extent of easing. The Australian dollar/dollar corrected lower after closing in positive territory on Monday, with trading around 0.6500 early on Tuesday.
Japan's top trade negotiator Ryoma Akazawa said on Tuesday that he met with U.S. vejck.cnmerce Secretary Howard Lutnik for two hours in Washington on Monday, seeking to reach a deal that will benefit both Japan and the United States. The dollar/yen rebounded to 148.00 earlier on Tuesday after a sharp decline on Monday.
GBP/USD benefited from a general weakness in the U.S. dollar and rose nearly 0.6% on Monday. The pair fell slightly, but remained above 1.3450 during the European session on Tuesday.
Gold is ready to go, rising more than 1% on Monday, hitting its highest level in a month. After hitting the near $3,400, gold underwent a technical correction and fell to $3,380 in early European session.
Euro: The intraday deviation of the euro/dollar is currently neutral. On the plus side, breaking through the small resistance level of 1.1720 will indicate that the correction callback from 1.1829 has been vejck.cnpleted at 1.1555. The intraday deviation will rise again, and retest 1.1829. On the downside, falling below 1.1555 will expand the correction and extend to the 38.2% retracement level of 1.1198 from 1.0176 to 1.1829.
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