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Dollar gains moderate as US yields retreat ahead of FOMC

Scotiabank says high-beta currencies are outperforming while EUR and GBP edge higher, though Iran tensions and FOMC risk keep the dollar supported.

Reported · Written up by our desk · Major Pairs

Scotiabank strategists Shaun Osborne and Eric Theoret said broad US dollar gains are moderating as US yields retreat and risk appetite improves after a tech-led selloff, with the dollar and rates remaining relatively supported into next week.

They pointed to geopolitical tensions around Iran and upcoming FOMC risks as key factors sustaining support for the dollar and US yields.

In FX moves cited by FXStreet, GBP/USD held small gains above 1.3300 after a sharp prior decline, supported by strong UK retail sales and July PMI data, but with upside capped as Middle East tensions escalate.

EUR/USD also faced pressure, trading near daily lows below 1.1400, while mixed S&P Global PMIs prompted no meaningful market reaction as investors stayed focused on inflation concerns and Middle East developments.

Latest closeEUR/USD 1.138 ▼0.2%|GBP/USD 1.331 ▼0.5%

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