A steadier dollar puts the brakes on the euro's two-day advance The euro's two-day run of gains stalled as the US dollar steadied after a rough patch, pushing EUR/USD lower. Softer US inflation delayed, but did not derail, the Federal Reserve's rate-hike expectations. The euro's short lived climb ran out of air. As the US dollar found its footing again, EUR/USD ended a two-day run of gains and slipped into pressure. What makes it interesting is that the move owed little to any fresh weakness in the single currency and far more to a dollar steadying after a bruising few sessions. A cooler than expected inflation reading earlier in the week did blunt the greenback's edge, but not enough to knock the Federal Reserve off its tightening path. In short, rate-hike expectations were delayed, not derailed. The dollar finds its footing The US Dollar Index (DXY), which measures the greenback's value against a basket of six major currencies, is trading around 100.60. On Wednesday it had slid to 100.35, its lowest level since June 18, before turning higher and steadying. That rebound is exactly what stood in the way of the euro's advance. When the base currency strengthens, the currencies standing opposite it naturally come under pressure. Inflation cools, yet the Fed holds its course Inflation delivered the week's biggest surprise. June CPI fell 0.4% on the month, the largest one-month decline since April 2020. That drop dragged the annual rate down to 3.5% from May's 4.2% and snapped a three-month acceleration streak. Core prices went nowhere, flat on the month and easing to 2.6% year on year, with both figures coming in under consensus. Softer inflation usually eases the pressure on interest rates, yet expectations for further Fed tightening have not fully faded. US data holds up The health check on the economy read reasonably firm. US Retail Sales rose 0.2% month on month in June, exactly in line with expectations. May's figure was revised slightly higher to 1.0% from 0.9%. The Retail Sales Control Group also landed as expected at 0.5%, though that is down from May's 0.8% increase. On the labour side, Jobless Claims came in better than forecast, a sign that the job market is still holding up. The ECB seen with one more hike Europe's policy signal is fairly clear too. Most economists expect the European Central Bank to raise interest rates one more time this year. That expectation offers the euro some longer-term support, even as a firmer dollar weighs on it in the near term. Middle East tensions push oil higher On the geopolitical front, tensions have escalated sharply. The US carried out a fifth consecutive night of strikes against Iranian targets, while Tehran responded by targeting US assets in Kuwait, Bahrain and Jordan. The situation is more fraught still because Iran has instructed Yemen's Houthis to close the Bab el-Mandeb gateway to the Red Sea if the US strikes its power network. That waterway is critical to global trade and oil flows. The strain is showing up clearly in crude. West Texas Intermediate (WTI) is trading near $80 and has gained around 12% so far this week. The euro's day across the majors Against the major currencies, the euro's performance was mixed. In today's trade it was strongest against the Swiss Franc. So while it had to absorb pressure against the dollar, it kept its grip against some other currencies. The overall picture is straightforward: softer US inflation and firm US data let the dollar steady, stalling the euro's small rally, while rising Middle East tensions kept pushing oil prices up. What this means for you • For traders and investors: With the dollar steadying, EUR/USD faces near-term pressure, so keeping an eye on Fed and ECB rate signals is worthwhile before taking forex positions. • For everyday consumers: Crude's roughly 12% jump this week could feed into fuel and transport costs down the line, a burden that eventually reaches your wallet. Questions & Answers 1. Why did the euro's rally stall? The US dollar steadied and regained its footing, pushing EUR/USD into pressure and ending the euro's two-day run of gains. 2. Where is the US Dollar Index right now? The DXY is trading around 100.60. On Wednesday it fell to 100.35, its lowest level since June 18. 3. What did June's US inflation data show? June CPI fell 0.4% on the month, the largest one-month decline since April 2020, and the annual rate eased to 3.5% from 4.2%. 4. How were oil prices affected? With Middle East tensions rising, West Texas Intermediate (WTI) is trading near $80 and has gained around 12% so far this week. 5. What is expected from the ECB? Most economists expect the European Central Bank to raise interest rates one more time this year. 6. How were US Retail Sales in June? Retail Sales rose 0.2% month on month, in line with expectations, and May's reading was revised up to 1.0% from 0.9%. https://trendkia.com/en/market/dollar-ke-snbhalate-hi-thami-euro-ki-teji-do-dina-ki-barhata-para-laga-breka-8176 TrendKia — Har trend, sabse pehle.