Forex Today: Choppy start to the week ahead of German inflation and US PMI data

Here is what you need to know on Monday, July 1:

The US Dollar (USD) struggles to find demand at the beginning of the third quarter as investors adjust their positions ahead of this week's key macroeconomic events and data releases. Later in the session, preliminary Consumer Price Index (CPI) data for June from Germany will be watched closely by investors. The ISM Manufacturing PMI for June and Construction Spending data for May will be featured in the US economic calendar.

The US Bureau of Economic Analysis reported on Friday that the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's (Fed) preferred gauge of inflation, rose 2.6% on a yearly basis in May. On a monthly basis, the PCE Price Index remained unchanged. These readings matched analysts' estimates and the USD Index closed the last trading day of the second quarter in negative territory on Friday. Early Monday, the USD Index continues to push lower and was last seen fluctuating deep in negative territory near 105.50. Meanwhile, the benchmark 10-year US Treasury bond yield holds steady at around 4.4% and US stock index futures gain between 0.25% and 0.4% in the early European session.

France held the first round of parliamentary election on Sunday. Exit polls showed that Marine Le Pen's far-right National Rally (RN) party won around 34% of the vote, ahead of the left-wing coalition New Popular Front (NFP) and President Emmanuel Macron's Together alliance, which are projected to receive 29% and 20.5%-23% of the vote, respectively, according to Reuters. The second round of election will take place on July 7. EUR/USD started the week on a bullish note and was last seen gaining about 0.5% on the day at 1.0770.

GBP/USD benefits from the selling pressure surrounding the USD and rises toward 1.2700 after closing the previous week virtually unchanged.

AUD/USD started the week with a bullish gap but struggled to gather momentum. After edging higher toward 0.6700, AUD/USD lost its traction and was last seen trading flat on the day at around 0.6670.

USD/JPY fluctuates in a tight range near 161.00 in the European morning on Monday. On Friday, the pair touched a multi-decade high near 161.30 but retreated afterward, with investors refraining from betting on further Japanese Yen weakness amid risk of intervention.