Forex Today: Dollar shows no signs of slowing down as focus shifts to Fedspeak

Here is what you need to know on Thursday, July 7:

The greenback continued to outperform its rivals and the US Dollar Index climbed to its highest level in nearly two decades above 107.00 on Wednesday before going into a consolidation phase early Thursday. The market mood seems to be improving in the European morning with US stock index futures posting modest daily gains. Later in the session, the European Central Bank (ECB) will release the minutes of its June policy meeting. The US economic docket will feature the weekly Initial Jobless Claims data and the trade balance figures for May. It's worth noting that the ADP announced that it will suspend its private employment report while revamping the methodology. During the American trading hours, several FOMC policymakers will be delivering speeches.

The minutes of the Fed's June policy meeting showed that participants 'concurred' that high inflation warranted 'restrictive' interest rates, with the possibility of a 'more restrictive stance' if inflation persists.

Meanwhile, Shanghai is widely expected to go into another coronavirus-related lockdown with the city's Health Commission reporting 32 new cases. Additionally, Japanese news outlets have reported that authorities were planning to tighten restrictions in Tokyo.

EUR/USD lost nearly 100 pips on Wednesday and touched a multi-decade low of 1.0161. The pair is staging a modest rebound toward 1.0200 in the early European session. Earlier in the day, the data from Germany showed that Industrial Production expanded by 0.2% in May, missing the market expectation of 0.4%.

GBP/USD is having a difficult time erasing its losses and stays relatively quiet near 1.1950 amid the ongoing political drama in the UK. The Conservative Party's 1922 Committee will reportedly hold an internal election to appoint a new executive, who can then decide whether to change the rules surrounding the grace period following the no-confidence vote.

Gold slumped to its lowest level since September 2021 at $1,731. Growing recession fears and the broad-based dollar strength weigh on gold's demand outlook. XAU/USD was last trading in positive territory above $1,740.

USD/JPY struggles to find direction on Thursday and continues to move sideways near 136.00. Although the 10-year US Treasury bond yield gained more than 4% on Wednesday, the pair failed to capitalize with the JPY finding demand as a safe haven.

Bitcoin gained 2% on Wednesday and seems to have settled above $20,000 for the time being. Ethereum consolidates Wednesday's recovery gains and fluctuates above $1,100.