Dollar Edges Higher on In-Line CPI as Yields Ease, Gold Shrugs

The dollar index firmed modestly to roughly 99.84, extending its rebound off Friday's two-month low near 99.5, even though Treasury yields eased across most of the curve on an in-line July CPI print. The index remains net lower over the past month, off about 1.4%. Risk sentiment offered no support for the move: the VIX fell roughly 4.7% to about 14.6, the S&P 500 rose 0.25% to 7,747.46 (just below its Aug 9 record of 7,757.64), and the Nasdaq was roughly flat — no haven-flow story behind today's dollar firmness. Commodities told a different story again: gold pushed up toward $4,400, breaking above its 100-day moving average, with silver, platinum and copper (a record high) all bid — strength that reads as supply-driven rather than dollar-driven.

US July CPI headline printed 3.4% y/y, in line with the 3.4% forecast and down from 3.5% in June — a second straight month of slowing, disinflationary but not a surprise. The rest of the print: headline +0.1% m/m; core +0.2% m/m, 2.5% y/y (down from 2.6% in June). The Treasury curve richened modestly: the 10-year eased 0.8bp to 4.676% and the 30-year was roughly flat at 5.241%, with the front end and belly also a touch softer. That's a mixed, front-belly-led move, not a clean repricing — yields easing into an as-expected print is the conventional read of cooling Fed hike-talk tied to the Iran energy shock, though the moves are too small on their own to call decisive.'

GBP/USD slipped 15 pips (-0.11%) to 1.34924 from 1.35079, easing back after trading modestly higher intraday on the in-line print. USD/CAD was little changed, closing around 1.3925 after opening near 1.3936, pausing following the Canadian dollar's rally on last week's strong July jobs report.

GBP/USD's rotation stayed narrow: it fell 15 pips (-0.11%) to 1.34924 from 1.35079 at Wednesday's NY close. FXStreet reported the pair traded modestly higher intraday as in-line US CPI trimmed September Fed rate-hike bets, before easing back into the close. The policy backdrop: the Bank of England held Bank Rate at 3.75% in a 6-3 vote at July's meeting, and Governor Andrew Bailey said it was 'encouraging' that CPI is 'below where we thought it would be.' Sterling had firmed to a multi-week high near 1.3500 on Aug 7 after weak US payrolls, before consolidating this week. Next up: UK ONS GDP for June and the Q2 first quarterly estimate, due 07:00 BST, with consensus at +0.4% QoQ and +1.1% YoY versus a prior +0.6% QoQ and +0.9% YoY — alongside US PPI, both due Thursday.

US: July PPI and weekly initial jobless claims, both due 8:30am ET Thursday. UK: ONS GDP monthly estimate for June and the Q2 first quarterly estimate, due 07:00 BST, consensus +0.4% QoQ / +1.1% YoY versus a prior +0.6% QoQ / +0.9% YoY. Japan: Corporate Goods Price Index (CGPI/PPI) for July, due from the BOJ at 8:50am JST. Eurozone: June industrial production, due in Eurostat's mid-August slot. No Canadian data is scheduled today, and no ECB speakers were confirmed.