Forex Today: Fears remain the same

What you need to take care of on Tuesday, July 5:

Slow start to the week, as US markets were closed due to the Fourth of July Holiday. The dollar gathered some strength by the end of the day, but action was limited as traders stayed away from their desks.

Asian shares posted modest gains, but European indexes hardly maintained the green, reflecting persistent growth and inflation concerns. Wall Street futures edged marginally lower.

GBP/USD trades around 1.2100, as Brexit woes undermined demand for the Pound. The Labour party is willing to fight Prime Minister Boris Johnson over his Brexit legacy at the next election. The agreement created turmoil within the UK that exacerbates price pressures amid trade disruption. Entire industries in Germany could collapse due to natural-gas supply cuts from Moscow, according to Yasmin Fahimi, the country’s top union official.

 The EUR/USD pair trades around 1.0420, not far from its Friday close. Dismal European data undermined demand for the shared currency, as the May Producer Price Index was up by 36.3% YoY. The energy crisis also hurt the EUR amid the Russian invasion of Ukraine.

Commodity-linked currencies advanced against the greenback. USD/CAD trades around 1.2860, while the AUD/USD pair is now at 0.6860. The Reserve Bank of Australia will announce its monetary policy decision early on Tuesday and will surely revive volatility after a quiet Monday.

 In the US, attention remains on the Biden administration as officials are discussing whether or not to remove Chinese tariffs imposed by former President Donald Trump. A decision on the matter may be out this week.

 The dollar advanced against its safe-haven rivals, with USD/CHF now trading at 0.9610 and USD/JPY at 135.70.  

Gold Price saw limited activity, now changing hands at around $1,807 a troy ounce. Crude oil, on the other hand, is up, with WTI trading at $110.45 a barrel.