The US dollar has resumed its decline after a corrective rebound, as support for the currency proved insufficient to sustain the recovery. Selling pressure increased as long-term US Treasury yields fell following reports that the US Treasury was prepared to expand its bond-buyback operations. Larger buybacks support the government bond market and can contribute to lower yields, reducing the dollar’s interest-rate advantage and limiting its rebound.

At the same time, geopolitical tensions surrounding Iran continue to support demand for the US dollar as a safe-haven asset. So far, however, this factor has not been strong enough to produce a sustained rise in the currency.

The move comes ahead of a busy US data calendar that could help clarify whether the recent dollar pullback is mainly a reaction to rates and yields or part of a broader reassessment of the outlook. Markets will focus today on revised second-quarter GDP figures, the core Personal Consumption Expenditures (PCE) price index, personal income and spending data, and durable goods orders.

Forecasts suggest that US GDP growth may be revised down from 2.1% to 1.5%, while the core PCE price index is expected to show annual growth of 3.3% and a monthly increase of 0.2%. A combination of slower economic growth and persistent inflationary pressure could complicate Federal Reserve policy decisions, forcing policymakers to balance the risk of economic weakness against the need to keep inflation under control. Markets will also watch comments from Federal Reserve officials for clues about how policymakers are assessing current inflation risks and signs of an economic slowdown.

USD/CHF

USD/CHF fell back toward 0.8000 after recovering to 0.8045 last week, forming a dark cloud cover pattern in the process.

If dollar weakness continues, the pair could break below 0.7980 and move toward the recent low around 0.7950. The bearish scenario would be invalidated if the price establishes itself firmly above 0.8045.

Key events for USD/CHF:

• Today at 11:00 (GMT+3): Swiss ZEW Economic Expectations
• Today at 15:30 (GMT+3): US core Personal Consumption Expenditures (PCE) price index
• Today at 15:30 (GMT+3): US GDP

USD/CAD

USD/CAD has also resumed its decline after an unsuccessful attempt to extend the recent recovery. Technical analysis points to a potential move toward the 1.3740–1.3780 area, with a dark cloud cover pattern forming on the daily chart.

A renewed corrective recovery could develop if the pair establishes itself firmly above 1.3870.

Key events for USD/CAD:

• Today at 15:30 (GMT+3): Canadian wholesale sales
• Today at 17:30 (GMT+3): US crude oil inventories
• Today at 18:45 (GMT+3): speech by Thomas Barkin, a member of the Federal Open Market Committee (FOMC)

The dollar’s recovery is losing momentum as Treasury yields decline, although geopolitical tensions continue to provide some support for the US currency as a safe-haven asset. For USD/CAD and USD/CHF, that leaves today’s US releases and Fed commentary as the main near-term catalysts, with the reaction to yields and inflation data likely to shape whether the recent correction extends or gives way to another rebound.