USD faces pressure ahead of CPI data and Trump tariff announcements

The US dollar remains under mild pressure as markets await next week's critical events, particularly the US CPI release and Trump's anticipated tariff announcements. With Trump setting an August 1st deadline for new tariff implementations, traders are positioning cautiously ahead of potential market volatility. The upcoming CPI data carries heightened importance as it could influence Federal Reserve policy decisions amid ongoing trade tensions. Markets are treating this as another 'TACO game' scenario, where tariff announcements create temporary market disruptions before fundamental data reasserts control. Technical levels show the Dollar Index hovering near support, with resistance emerging around recent highs. The confluence of inflation data and trade policy uncertainty suggests increased volatility for USD pairs next week, with traders advised to monitor both developments closely for directional cues.