Forex Today: Dollar consolidates gains ahead of Fed

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What you need to know on Monday, July 26:

 The dollar retained its strength heading into the weekly close but was unable to extend gains. Appetite for high-yielding assets dented demand for the greenback, while US indexes closed at all-time highs. Government bond yields maintained the positive tone, and settled near the upper end of their weekly range, also reflecting a better market mood.

Data released on Friday indicated that the economic recovery continued at an uneven pace in July. Markit published the flash July PMIs. European indexes were mostly upbeat, while in the US and the UK the services sector contracted.

Majors remained range-bound at the end of the week, consolidating losses against their American rival, as the US Federal Reserve looms. Choppy trading will likely prevail ahead of Wednesday when the central bank will announce its decision on monetary policy. The focus is on tapering. The central bank will likely hint some action for the last quarter of the year.

Gold finished the week with modest losses just above the 1,800 mark. Crude oil prices posted a nice comeback by the end of the week, with WTI settling at $72.15 a barrel.

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