Meanwhile, the Australian Dollar (AUD) is strengthening after Australia's July inflation figures came in above expectations. Elias Haddad of Brown Brothers Harriman noted that headline Consumer Price Index (CPI) inflation rose 1.0% month-on-month, compared with the expected 0.9% increase and a 0.1% decline in June. Annual inflation eased to 3.5%, but remained above the expected 3.3%. The trimmed mean CPI remained at 3.6% for a second consecutive month, also above the Reserve Bank of Australia’s (RBA) forecast of 3.3% for the end of December. As a result, futures markets are now almost fully pricing in a 25-basis-point interest-rate increase to 4.60% by the end of the year, compared with a probability of only 60% before the July inflation report. However, Haddad believes the risks are still tilted toward a longer pause, as monetary policy is already restrictive and the labor market is weakening. At the same time, Australia’s attractive interest-rate carry and its exposure to commodities linked to energy, artificial intelligence, and defense continue to support the AUD.

The British Pound (GBP) is showing a more mixed performance against the USD. The GBPUSD pair has pulled back toward the 1.3620 area after failing to break above resistance near 1.3660. The pair remains in a generally positive trend, but its inability to move higher could lead to a deeper correction. These signals suggest that buyers still have some control, although upward momentum has weakened. If GBPUSD falls clearly below 1.3620, the next important support area is around 1.3565, followed by 1.3520. A sustained move above 1.3660, on the other hand, could open the way toward the February highs between 1.3716 and 1.3730. Investors are also watching the broader inflation outlook, while Haddad had previously expected the PCE data to remain relatively moderate, which would allow the Federal Reserve to keep interest rates unchanged.

The current foreign exchange market suggests that investors should remain selective rather than make aggressive bets on a single currency. EURUSD could remain sensitive to US inflation data and expectations for Federal Reserve policy, while GBPUSD still has room to rise if it breaks decisively above the 1.3660 resistance level. The Australian Dollar has benefited from higher-than-expected inflation and growing expectations of an RBA rate increase, although a weaker labor market could limit its gains. At the same time, rising trade tensions between the United States and Canada create additional risks for the Canadian Dollar. Overall, the most attractive opportunities may come from currencies supported by strong fundamentals and favorable interest-rate expectations. However, investors should keep their position sizes under control because central-bank decisions, inflation data, and trade policy can quickly change the direction of the market.