USD Weakens Across the Board as BOJ Eyes Rate Hike, Gold Rebounds

The US dollar edged lower during the European session amid a mixed market mood, with safe-haven gold staging a rebound. The greenback faced broad-based selling pressure as multiple macro developments weighed on sentiment. The Bank of Japan is reportedly preparing for a September rate hike with an accelerated pace of tightening, bolstering the yen and pressuring USD/JPY. In Europe, French inflation re-accelerated in July with core prices also moving higher, while German wholesale prices bounced back as energy tax cut effects lapsed — both factors supportive of a firmer euro. The Swiss economy posted solid quarterly growth of 1.5% in Q2, lending support to the franc. Meanwhile, China's new bank loans contracted again in July for the second time, signaling persistent economic weakness in the world's second-largest economy and dampening risk appetite. Bitcoin lost the critical $64,000 support level, adding to the cautious market tone. Traders should monitor upcoming US data releases and BOJ communications for further directional cues on dollar pairs.