The US dollar is showing strength today as we gear up for what promises to be an eventful week in the financial markets. The British pound is under pressure, losing nearly half a cent amid rising expectations of a rate cut this week. Chancellor of the Exchequer Reeves is also highlighting the poor state of public finances inherited from the Conservative government.
Meanwhile, US index futures are building on the recovery seen at the end of last week. Gold remains firm but is struggling to sustain gains above $2400. September WTI has experienced wide ranges in the past two sessions but is trading quietly today between $76.85 and $77.70.

Asia-Pacific Markets
The upcoming Bank of Japan (BOJ) meeting on July 31 is a key focus for the region. Attention will be on two main policy levers: the overnight target rate and bond purchases. Ahead of the BOJ meeting, Australia will release its retail sales data and, more importantly, its Q2 CPI figures. The Reserve Bank of Australia (RBA) is set to meet next week.
The US dollar failed to maintain its early momentum before the weekend, which briefly pushed it above the previous session's high. Many market participants may be hesitant to take on new positions ahead of the BOJ and FOMC meetings on July 31.
With some pressure easing on the yen, the Australian dollar stabilized before the weekend.

European Markets
In Europe, the most significant events this week are the preliminary eurozone CPI estimate for July and the Bank of England (BoE) meeting, scheduled for Wednesday and Thursday, respectively. The euro fell to around $1.0825 in the middle of last week and consolidated during the last two sessions, holding below $1.0870. Today, the euro has returned toward last week's lows. Sterling is experiencing a volatile day, trading on both sides of Friday's range and dropping below Friday's low in late European morning turnover.

American Markets
In the US, this week is dominated by the FOMC meeting and labor market data. The week starts slowly but gains momentum with the JOLTS report on Tuesday, followed by Wednesday's ADP employment estimate and the conclusion of the FOMC meeting, and culminating with Friday's July jobs report. A dovish hold from the FOMC is widely anticipated.
Following last week's dovish rate cut by the Bank of Canada, the swaps market has increased the odds of a September rate cut to more than 75%, up from less than 50% a week ago. The dovish stance from the Bank of Canada pushed the US dollar above CAD1.38 for the first time since April. On July 25, the greenback made a marginal new high for the year near CAD1.3850 and is currently trading near CAD1.3820.