The U.S. dollar hovered just below a three-week high against a basket of currencies on Tuesday, July 15, 2025, as markets awaited critical U.S. inflation data that could shape the Federal Reserve’s near-term interest rate outlook.
The dollar’s strength has been bolstered by rising Treasury yields, with investors speculating about potential pressure on Federal Reserve Chair Jerome Powell amid ongoing criticism from President Donald Trump, who has hinted at seeking his early exit.
Currency Movements and Key Data
The euro climbed 0.2% to $1.1688, ending a four-day decline, while the pound and Swiss franc also regained ground ahead of U.S. Consumer Price Index (CPI) data and German investor sentiment figures.
Analysts anticipate headline inflation to rise to 2.7% annually from 2.4%, with core inflation expected at 3.0% from 2.8%.
BBVA strategist Roberto Cobos noted that stronger-than-expected CPI could reinforce the Fed’s cautious stance on rate cuts, supporting the dollar, while a lower reading might fuel calls for easing, weakening it.
Bitcoin and Global Reactions
Bitcoin, after hitting a record $123,153.22 on Monday, eased to around $117,550 by 0520 GMT, reflecting a pullback from a 14% weekly surge driven by optimism over U.S. crypto legislation.
The dollar remained steady at 147.71 yen, near its recent high of 147.89, while the dollar index dipped slightly to 98.003 from 98.136.
China’s economy grew 5.2% last quarter, beating forecasts, but the yuan weakened to 7.1766 before recovering to 7.175 amid concerns over future risks.
Policy Tensions
Powell has warned of rising inflation this summer due to tariffs, suggesting a hold on rate cuts until later in 2025.
Trump’s renewed demand for rates below 1%—against the current 4.25%-4.50% range—has intensified pressure.
Fed funds futures predict about 50 basis points of cuts by year-end, with a September reduction likely.
James Kniveton of Convera highlighted that stagnant inflation could amplify White House calls for Fed leadership changes.
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