The USD is mostly lower to start the day ahead of retail sales today and the Fed tomorrow

The US dollar is trading modestly lower against most major currencies to start the day, with one notable exception: it is slightly higher versus the British pound.

The market’s attention now turns to the Federal Reserve, which begins its two-day policy meeting today. While no change in interest rates is expected when the decision is announced Wednesday at 2 PM ET, traders will be closely monitoring the accompanying policy statement and Fed Chair Powell’s press conference for any signals about future direction.

Adding to the significance of this meeting is the release of the Fed’s updated Summary of Economic Projections and the dot plot, which could provide insight into how many rate cuts members see in the months ahead. Despite public calls from President Trump for an aggressive 100 basis point rate cut, those remarks are widely expected to be disregarded by the Fed, which remains focused on data and long-term stability. That said, the central bank is juggling a number of complicating factors: economic uncertainty from ongoing “wars”—trade conflicts, geopolitical tensions, and fiscal policy battles—makes it more likely that officials will maintain a “wait and see” posture for now.

Still, some data is starting to soften. Both initial and continuing jobless claims have ticked higher, suggesting a potential slowdown in the labor market. While not severe, the data hints that displaced workers may be finding it more difficult to secure new employment, a dynamic that could weigh on future growth if it continues.

In today’s economic calendar, several key reports are due. US retail sales (8:30 AM ET) are expected to show a -0.7% decline following a modest 0.1% increase last month. Stripping out autos, sales are forecast to rise by just 0.1%, matching the prior month. The more closely watched retail control group—a component used to estimate GDP—is expected to increase by 0.3% after falling -0.2% in the previous report. Also at 8:30 AM, import and export prices are each projected to fall by -0.2%.

At 9:15 AM ET, industrial production is anticipated to rise slightly by 0.1%, with capacity utilization holding steady at 77.7%. Then at 10 AM, business inventories are expected to remain unchanged at 0.0%, while the June reading of the NAHB Housing Market Index is projected to edge up to 36 from 34, a small but notable improvement in builder sentiment.

In the video above, I provide a technical look at the three major currency pairs—EURUSD, USDJPY, and GBPUSD—outlining key levels to watch as the US trading session gets underway.

Geopolitically, Pres. Trump left the G7 summit a day early to focus on the conflict in the Middle East. Political reported that he will convene with his closest military advisors to weigh the possibility of whether to join Israelis bombardment of Iran.