The US Dollar Index (DXY) fell by approximately 0.4% to 100.90 on Tuesday, following the release of softer-than-expected US inflation data for June. The headline Consumer Price Index (CPI) declined 0.4% month-over-month and slowed to 3.5% year-over-year, while Core CPI remained unchanged monthly and eased to 2.6% annually [1][2]. These figures were below market expectations, with annual inflation coming in at 3.5% versus a forecast of 3.8% and May’s 4.2% [2]. The softer inflation report led to broad US Dollar weakness, with EUR/USD rising around 0.4% toward 1.1420, GBP/USD advancing 0.3% toward 1.3390, USD/JPY falling 0.2% toward 162.20, and AUD/USD gaining 1.0% toward 0.6970 [1][2].
Chicago Fed President Austan Goolsbee described the inflation report as “surprisingly benign,” noting the encouraging services component but cautioning against overreacting to a single month’s data. He emphasized the need for several similar readings before feeling comfortable about inflation trends [1]. Meanwhile, Fed Chair Kevin Warsh maintained a hawkish tone, reiterating the central bank’s commitment to controlling persistent inflation and describing the US labor market as broadly stable, with low unemployment, limited layoffs, and solid nominal wage growth [2]. However, US employment indicators softened, as the ADP Employment Change four-week average declined to 19.75K from 21K, further reducing expectations of a Federal Reserve interest-rate increase in July [2].
The USD/CHF pair tumbled by 0.70% on Tuesday, trading at 0.8093, as the US inflation report prompted market participants to pare hawkish bets on the Federal Reserve. Despite the dip below 0.8100, technical analysis suggests the uptrend remains intact, with momentum favoring further upside as the Relative Strength Index (RSI) stays bullish above its 50-neutral level. Key resistance levels are identified at 0.8152 and 0.8171, while support lies at 0.8060 and 0.8030 [3].
Geopolitical developments also remain in focus, as US President Donald Trump announced a full blockade only on vessels traveling to and from Iranian ports and abandoned the proposed 20% US reimbursement fee for cargo crossing the Strait of Hormuz, replacing it with trade and investment agreements involving Gulf states [2].
Short-term technical analysis for EUR/USD shows the pair trading at 1.1423, holding a mildly bullish bias above both the 20-period and 100-period Simple Moving Averages. Immediate resistance is seen at 1.1434 and 1.1446, with support at 1.1418 and 1.1408 [2].
CONCLUSION
Softer US inflation data triggered a broad selloff in the US Dollar, boosting major currencies such as the Euro and Swiss Franc. Reduced expectations for a Federal Reserve rate hike in July and cautious commentary from Fed officials contributed to the market reaction. Technical outlooks suggest continued bullish momentum for EUR/USD and USD/CHF, while geopolitical developments add further complexity to the global currency landscape.