Markets got the July U.S. inflation report they wanted on Wednesday, with the Consumer Price Index landing in line with forecasts and pulling the annual rate down to its slowest pace in two months. Stocks pushed to within striking distance of a fresh record and the dollar clawed back an early session loss to close higher against every major currency but the Australian dollar, even as the standoff over the Strait of Hormuz kept a floor under oil prices.
Check out the forex news and economic updates you may have missed in the latest trading session!
News Headlines & Data:
- U.S. API Crude Oil Stock Change for August 7, 2026: 9.07M (2.69M previous)
- Japan Reuters Tankan Index for August 2026: 18.0 (14.0 forecast; 13.0 previous)
- Germany Harmonized Inflation Rate Final for July 2026: 2.8% y/y (2.8% y/y forecast; 2.4% y/y previous)
- Germany Inflation Rate Final for July 2026: 2.8% y/y (2.8% y/y forecast; 2.3% y/y previous)
- Japan Machine Tool Orders for July 2026: 50.4% y/y (42.0% y/y forecast; 52.8% y/y previous)
- U.S. MBA 30-Year Mortgage Rate for August 7, 2026: 6.77% (6.81% previous)
- U.S. MBA Mortgage Applications for August 7, 2026: 3.6% (-2.9% previous)
- Canada Building Permits for June 2026: 18.5% m/m (-0.2% m/m forecast; -1.7% m/m previous)
- U.S. CPI Growth Rate for July 2026: 3.4% y/y (3.4% y/y forecast; 3.5% y/y previous)
- U.S. EIA Crude Oil Stocks Change for August 7, 2026: 17.42M (2.48M previous)
Broad Market Price Action:
Dollar Index, Gold, Oil, S&P 500, U.S. 10-yr Yield, Bitcoin Overlay – Chart Faster With TradingView
Wednesday’s session hinged on one number. The Bureau of Labor Statistics reported headline CPI up 0.1% for July, pulling the annual rate to 3.4% from June’s 3.5%. Core inflation matched forecasts too, rising 0.2% for the month and cooling to 2.5% year over year, the slowest annual pace since March 2021. The in-line report gave Fed officials room to keep rates steady, a relief after three policymakers dissented in favor of a hike at the July meeting. A potential takeaway from an unsurprising report is that cooling inflation, combined with last week’s weak jobs data, buys the Fed more time before it has to move. Stocks welcomed the news, oil held onto its geopolitical premium from the standoff over the Strait of Hormuz, and Treasury yields ended the day close to unchanged despite a volatile ride around the data.
The S&P 500 added roughly 0.20% to close near 7,747, keeping the index within a stone’s throw of last Friday’s record of 7,757.64. The index spiked as high as roughly 7,772 in the minutes after the CPI release, gave back most of that pop within the hour, and spent the rest of the session chopping in a tighter band between roughly 7,726 and 7,751.
Gold added roughly 0.83% to settle near $4,413 an ounce, extending a rally tied to both the dollar’s moves and the war premium building around the Strait of Hormuz. The path wasn’t a straight line. Gold ground higher through the Asian and London sessions toward the $4,404 area, spiked to an intraday high near $4,441 in the minutes after the CPI print, then spent the rest of the U.S. session drifting back toward its overnight range, ending well off the day’s best level but still comfortably higher on the day.
Bitcoin was the session’s weakest major asset apart from oil, slipping roughly 0.47% to settle near $63,362. The cryptocurrency chopped in a roughly $63,600 to $64,000 range through the Asian and London sessions before spiking to an intraday high near $64,435 immediately after the CPI release, mirroring the brief risk-on pop in equities and gold. That strength didn’t last. Bitcoin reversed hard through the U.S. session, falling to a session low near $63,239 before stabilizing into the close, a round trip that possibly reflects how quickly the CPI relief rally faded once traders turned to positioning for Thursday’s PPI report.
WTI crude fell roughly 0.69% to settle near $83.20 a barrel, the session’s other laggard. Crude dipped as low as roughly $82.50 during the European morning with no fresh headline attached to the move, before stabilizing closer to $83.18 ahead of the U.S. session. Iran’s Islamic Revolutionary Guard Corps signaled this week that the country has shifted to an “offensive doctrine” for operations abroad, and President Trump claimed on Wednesday to hold total control over the Strait of Hormuz, an assertion Iran has repeatedly disputed by continuing to strike tankers transiting the waterway. Oil traffic through Hormuz keeps flowing at a reduced pace despite the rhetoric, and Wednesday’s price action suggests the market is, for now, treating the standoff as a stalemate rather than a fresh escalation.
The 10-year Treasury yield ended the day roughly flat near 4.70%, masking a choppier ride underneath. Yields drifted down to roughly 4.65% through the Asian and London sessions before the CPI report and a $42 billion 10-year note auction pushed them back toward the day’s opening level. The auction cleared at the highest yield for the tenor since 2007, and dealers are bracing for Thursday’s 30-year bond sale to price at the highest financing rate in roughly a quarter century, a reminder that swelling bond supply and elevated inflation are keeping long-dated yields sticky even as the Fed’s near-term path turns more dovish.
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FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Major Currencies – Chart Faster With TradingView
The dollar’s Wednesday round trip tracked the CPI print step for step. The greenback traded net higher against the majors through the Asian session, even though desks flagged no specific overnight catalyst behind the move, and topped out a couple of hours ahead of the London open.
The dollar turned lower just ahead of London trading and kept sliding through the session and into the opening stretch of U.S. hours. That drift correlated with an unconfirmed report that Washington and Tehran would extend their already-lapsed ceasefire, a claim Iran dismissed by saying there was nothing left to extend.
The bottom fell out right around the CPI release in the early U.S. session. The dollar hit its session low just after the report crossed, then reversed hard and rebounded through the balance of the U.S. session, stabilizing in the afternoon near its best levels of the day.
At Wednesday’s close, the dollar ranked among the day’s best-performing major currencies, gaining against every peer except the Australian dollar. The greenback added roughly 0.39% against the New Zealand dollar, 0.35% against the Swiss franc, and 0.18% against the euro, with smaller gains against the yen, pound, and Canadian dollar, while slipping a marginal 0.01% against the Aussie.
Upcoming Potential Catalysts on the Economic Calendar
- U.K. RICS House Price Balance for July 2026 at 11:01 pm GMT
- Japan PPI Growth Rate for July 2026 at 11:50 pm GMT
- Reserve Bank of Australia Kent Speech at 12:15 am GMT
- New Zealand Business Inflation Expectations for September 30, 2026 at 3:00 am GMT
-
U.K. GDP Growth Rate Prel for June 30, 2026 at 6:00 am GMT
- U.K. Manufacturing & Industrial Production for June 2026 at 6:00 am GMT
- Swiss Producer & Import Prices for July 2026 at 6:30 am GMT
- China Monetary Developments for July 2026
- Euro area Industrial Production for June 2026 at 9:00 am GMT
- U.K. NIESR Monthly GDP Tracker for July 2026 at 11:00 am GMT
- U.S. Fed Hammack Speech at 12:15 pm GMT
- U.S. Initial Jobless Claims for August 8, 2026 at 12:30 pm GMT
- U.S. PPI Growth Rate for July 2026 at 12:30 pm GMT
- U.S. Fed Barkin Speech at 12:40 pm GMT
Thursday’s calendar centers on inflation again, with the July Producer Price Index due at the same 8:30 a.m. ET slot that just delivered Wednesday’s CPI relief. A soft PPI print would likely reinforce the case for a Fed pause building since Wednesday’s data, while a hot number could revive the same rate-hike debate that produced three dissents at the July meeting.
Fed speakers Hammack and Barkin get their first chance to react to the CPI data in public remarks, and their tone on the divide between hawks and doves is worth watching.
The Strait of Hormuz standoff remains unresolved heading into Thursday, and any fresh escalation, or any credible sign of the Oman-mediated talks advancing, could still move oil and complicate whatever signal the PPI report sends.
Stay frosty out there, forex friends!
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