Forex Today: Relentless dollar buying continues as investors seek refuge

Here is what you need to know on Tuesday, July 12:

The US Dollar Index (DXY) continues to push higher early Tuesday after having gained more than 1% on Monday. The greenback continues to find demand as a safe haven with investors seeking refuge amid growing recession fears. US stock index futures are down between 0.8% and 1% in the European morning and the DXY trades at its highest level in nearly two decades above 108.00. ZEW Survey from Germany and business sentiment data from the US will be looked upon for fresh impetus. The 10-year US Treasury note auction is scheduled to take place at 1700 GMT later in the day. The 10-year US T-bond yield is down more than 2% on the day at 2.925%, highlighting the risk-averse market environment.

To contain the new Omicron BA4 and BA5 subvariant infections, China has announced the city of Wugang in the Henan Province has gone into lockdown. Market participants remain worried about Shanghai going into a lockdown as well with the number of daily confirmed cases rising in the city.

Meanwhile, Europe is facing heightened risks of going into an energy crisis. Speaking on Monday, German Economy Minister Robert Habeck said that it would be difficult to say whether Nord Stream 1 gas pipeline would come back online after the maintenance.

On Monday, the Federal Reserve Bank of New York's monthly Survey of Consumer Expectations showed that the US Consumers' one-year inflation expectations rose to 6.8% in June from 6.6% in May. Although the three-year inflation expectations declined to 3.6% from 3.9%, the greenback continued to outperform its rivals. Ahead of Wednesday's Consumer Price Index (CPI) data, White House Press Secretary Karine Jean-Pierre told reporters that she was expecting the CPI print to be "highly elevated."

EUR/USD slumped to its weakest level since December 2002 and was last seen trading within a touching distance of all-important parity. 

GBP/USD lost more than 1% on Monday and extended its slide early Tuesday. The pair is currently trading at its lowest level in more than two years below 1.1850.

USD/JPY stays relatively quiet above 137.00 on Tuesday following Monday's impressive upsurge. The JPY manages to find demand as a safe haven and stays resilient against its rivals so far.

Gold erased its losses after having dropped to a fresh 2022 low below $1,730. Falling US Treasury bond yields seem to be helping XAU/USD find support.

Bitcoin dropped below $20,000 during the Asian trading hours and touched a daily low of $19,594 before recovering modestly. Ethereum is down more than 2% on a daily basis and closes in on $1,000.