Key Updates for Tuesday, July 22nd
The US Dollar (USD) started the week facing challenges, showing significant losses against major currencies on Monday. Although it maintained some stability early Tuesday, investors seemed hesitant to jump back into the market. Much of the focus remains on the ongoing conflict between US President Donald Trump and Federal Reserve Chairman Jerome Powell.
This Week’s US Dollar Price
The table below outlines the changes in the US dollar (USD) against various currencies this week. Notably, USD performed weakest against the euro.
| Currency | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | – | -0.50% | -0.38% | -0.06% | -0.18% | 0.06% | 0.48% | -0.36% |
| EUR | 0.50% | – | 0.20% | 0.45% | 0.30% | 0.53% | 0.81% | 0.10% |
| GBP | 0.38% | -0.20% | – | 0.04% | 0.16% | 0.36% | 0.82% | 0.10% |
| JPY | 0.06% | -0.45% | -0.04% | – | -0.10% | 0.17% | 0.50% | -0.13% |
| CAD | 0.18% | -0.30% | -0.16% | 0.10% | – | 0.30% | 0.66% | -0.23% |
| AUD | -0.06% | -0.53% | -0.36% | -0.17% | -0.30% | – | 0.35% | -0.29% |
| NZD | -0.48% | -0.81% | -0.82% | -0.50% | -0.66% | -0.35% | – | -0.72% |
| CHF | 0.36% | -0.10% | -0.10% | 0.13% | 0.23% | 0.29% | 0.72% | – |
This table illustrates the changes in rates among major currencies. The base currency is listed on the left, with the estimated currency at the top. For example, if you select US dollars from the left and look at Japanese Yen, the value represents USD/JPY.
Recent reports indicate that Rep. Anna Paulina Luna has urged the Department of Justice (DOJ) to consider criminal charges against Speaker Jerome Powell. This information came from a letter noted by Fox News. Earlier, Treasury Secretary Scott Bescent mentioned on CNBC the need to evaluate the Federal Reserve’s operations. The USD Index declined by over 0.6% on Monday, nearly wiping out previous week’s gains. As of early Tuesday, the USD index was fluctuating around 98.00. Meanwhile, US stock index futures were relatively flat after a mixed performance on Wall Street.
This week’s US Economic Calendar includes the Richmond Fed Manufacturing Index, set to be released in the latter part of July. Jerome Powell and Vice-Chairperson of Supervision Michelle Bowman are scheduled to speak during US trading hours, but the Fed is not expected to comment on its monetary policies given its current situation.
EUR/USD
The pair is expected to stay in a consolidation phase just below 1.1700 after a robust performance on Monday. The European Central Bank (ECB) will also present the Bank Loan Survey during the European session.
The Reserve Bank of Australia (RBA) released minutes from its July monetary policy meeting, indicating that the board is considering further interest rate cuts and is focused on timing and extent of easing. After closing positively on Monday, AUD/USD is trading around 0.6500, facing some adjustments on Tuesday morning in Europe.
Ryosei Akazawa, Japan’s lead trade negotiator, stated on Tuesday that he met with US Secretary of Commerce Howard Lutnick in Washington for two hours, advocating for an agreement that favors both nations. Following a steep drop on Monday, USD/JPY is showing signs of recovery, approaching 148.00 early Tuesday.
GBP/USD
This pair dropped by 0.6% on Monday, leveraging the weakness of the US dollar. Although the edges are lower, it’s likely to surpass 1.3450 during Tuesday’s European session.
Gold
Gold gained bullish momentum, rising over 1% on Monday and reached its highest point in a month. After approaching $3,400, XAU/USD has made a technical adjustment, now sitting at $3,380 on Tuesday morning in Europe.
FAD FAQ
US Monetary Policy
The Federal Reserve shapes US monetary policy focusing on price stability and full employment. Adjusting interest rates is a key tool. If prices rise above the 2% target, the Fed may increase rates, strengthening the USD. Conversely, if inflation falls below 2% or unemployment rises, the Fed may lower rates to encourage borrowing.
FOMC Meetings
The Federal Reserve holds eight policy meetings annually, where the Federal Open Market Committee (FOMC) evaluates economic conditions and makes policy decisions. FOMC membership includes 12 federal officials including the Governor’s Committee members and a rotating selection of Regional Reserve Bank presidents.
Quantitative Easing
During extreme circumstances, the Federal Reserve can deploy Quantitative Easing (QE), a method to boost credit flow in the financial system. Used during crises, such as the 2008 financial collapse, it involves the Fed printing dollars and purchasing bonds from financial institutions, which typically weakens the USD.
Quantitative Tightening
Quantitative Tightening (QT) is the opposite of QE, wherein the Federal Reserve halts bond purchases and does not reinvest in new bonds. This usually has a positive effect on the value of the US dollar.
