Forex Today: US Dollar shakes off bearish pressure ahead of mid-tier data

Here is what you need to know on Friday, July 25:

The US Dollar (USD) Index gained more than 0.3% on Thursday and snapped a four-day losing streak. Early Friday, the action in financial markets turns subdued as investors await the next catalyst. Later in the day, June Durable Goods Orders will be featured in the US economic calendar.

The European Central Bank (ECB) left key rates unchanged, as widely anticipated, following the July policy meeting. In the post-meeting press conference, ECB President Christine Lagarde noted that risks to economic growth remain tilted to the downside but reiterated that they are in a "wait and watch" situation, given the uncertainty surrounding the impact of the EU-US trade relations on the economic outlook. After closing modestly lower on Thursday, EUR/USD stays in a consolidation phase at around 1.1750 early Friday. Later in the session, IFO sentiment survey from Germany will be scrutinized by market participants.

The US Department of Labor reported on Thursday that the weekly Initial Jobless Claims declined to 217,000 from 221,000 in the previous week. This reading came in better than the market expectation of 227,000. Other data from the US showed that the business activity in the private sector expanded at an accelerating pace in early July, with the S&P Global Composite Purchasing Managers Index (PMI) rising to 54.6 (preliminary) from 52.9 in June.

Meanwhile, US President Donald Trump repeated his call for lower interest rates during his visit of the Federal Reserve headquarters in Washington, DC. During Trump's Fed tour, US Treasury Secretary Scott Bessent gave an interview on Fox Business, reiterating the Trump team's common refrains against the Fed and also pivoting back into talking about US-China trade talks and tariffs in general. "The US is in a pretty good place with China on trade," Bessent noted. On the same matter, the Wall Street Journal reported that the Trump administration is preparing for a new round of trade talks with China next week, with a focus on securing an economic agreement that will increase the US' access to Chinese markets, particularly in business and technology. The USD Index fluctuates in a tight channel at around 97.50 in the European session and US stock index futures rise between 0.1% and 0.2%.

The UK's Office for National Statistics reported on Friday that Retail Sales rose by 0.9% on a monthly basis in June. This reading followed the 2.8% decrease recorded in May but came in worse than the market expectation for an increase of 1.2%. GBP/USD stays on the back foot in the European morning and trades below 1.3500.

The data from Japan showed early Friday that the Tokyo Consumer Price Index (CPI) rose by 2.9% on a yearly basis in July, compared to the 3.1% increase recorded in June. After climbing toward 147.50 during the Asian trading hours, USD/JPY lost its traction and retreated to the 147.00 area by the European morning.

Following Wednesday's sharp decline, Gold continued to push lower on Thursday and lost more than 0.5% on the day. XAU/USD remains under modest bearish pressure and falls toward $3,550 early Friday.