US Dollar Price Forecast: Inflation Risks Lift DXY – Can GBP/USD and EUR/USD Hold Up?
The US dollar strengthened on renewed inflation fears driven by high energy costs and strong US economic data. June retail sales rose 0.2% and core retail sales increased 0.5%, while initial jobless claims dropped to 208,000, supporting the view of a resilient consumer and labor market. Markets now see a 60% chance of a Fed rate hike by September. The European Central Bank meeting on July 23 is expected to hold the deposit rate at 2.25%, though energy-induced inflation remains a concern. Sterling is supported by expectations of prudent UK fiscal policy and at least one more BoE rate hike. Technically, DXY is consolidating near 100.75 below a descending trendline, with resistance at 100.89. GBP/USD remains bullish above its rising trendline at 1.3466, while EUR/USD is stuck below resistance at 1.1461, consolidating above its trendline near 1.1439.
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