USD Steadies as Markets Await IEA Oil Reserve Decision and US CPI Data

The US dollar traded in a tentative range during the European session as markets positioned ahead of two major catalysts: the IEA's anticipated announcement on strategic oil reserve releases at 1300 GMT and the upcoming US CPI report. Oil prices crept higher after initial volatility surrounding geopolitical tensions, with G7 energy ministers reaffirming support for using strategic oil reserves to stabilize supply. Japan confirmed plans to release reserves from both private sector and state stockpiles. The ECB added to the cautious tone, with policymaker Kazimir suggesting a rate hike on Iran-related inflation pressures may be closer than previously thought, while Villeroy struck a more measured stance. Next week's central bank bonanza, featuring multiple policy decisions, is adding to positioning uncertainty. EUR/USD and USD/JPY traders are particularly focused on CPI forecast distribution, as any upside surprise could reinforce dollar strength. Near-term, the dollar index is consolidating as traders weigh energy supply relief against persistent inflation risks and geopolitical premium.