US FX WRAP: Dollar rangebound ahead of FOMC Minutes

The Dollar Index saw marginal gains on Tuesday, albeit in holiday thin trade amid a lack of tier 1 US data and Fed speak. The Greenback lacks direction due to headline catalysts being light as desks await the next risk event. Attention continues to remain on US Treasury yields, which remain elevated and are weighing on sentiment. Ahead, the FOMC Minutes are due on Wednesday and attention is on how hawkish (or not) they will be, while Fed pricing was little changed ahead of the September confab as a hold currently seems most likely based on recent data, albeit there is still more to come.

G10 FX was lower across the board to varying degrees against the Dollar in pretty thin headline newsflow. Antipodeans were the underperformers, and likely hit on risk, with the EUR the relative outperformer, albeit still flat. For the single-currency, ECB's Chief Economist Lane said that EZ inflation being one percentage point above the ECB's 2% target is a lot.

Elsewhere, Cable saw a slight knee-jerk higher following the UK jobs report, and likely on the earnings metrics, although this proved shortlived as the Unemployment Rate remained sticky vs expectations of a downtick.

Looking at the Loonie, it saw very modest weakness as a White House Official confirmed leaders of the US and Canada spoke last night and that "no resolution that would prompt the US President to hold off on the retaliation tariffs which are set for August 19th". Despite this, there were conflicting later reports that a deal between the US and Canada to stave off new tariffs on Canadian goods is now on President Trump's desk, and it is now up to Trump whether the 50% duty goes into effect, as scheduled, at midnight.