Dollar dips as oil advances; attention on US CPI

The dollar eased on Wednesday, with caution ahead of US inflation data, while crude oil continued its advance on Middle East tensions.

AUG/12/2026 · 2 min readBy the ForexCommand team · Methodology · Standards

The dollar eased on Wednesday, with caution ahead of US inflation data, while crude oil continued its advance on Middle East tensions.

Market overview

Our proprietary FSI registers 65 (Greed), with the MRS down to 59 after three sessions at 64 and the CTS high at 80. On an intraday basis, our strength gauge ranks the euro as the strongest major currency, while the dollar is the weakest, pulling back after recent gains. The euro leads by default rather than by momentum: it is still stalled below its 100-day average.

The dollar eased ahead of US CPI after two sessions of gains, and US yields slipped as inflation caution offset the oil rally, a reversal from yesterday when that same rally drove them higher. The dollar index is still consolidating below 100.00, with no dovish outcome priced in.
WTI crude oil advanced above $82.50, supported by conflicting signals on a potential US-Iran deal and a continued Strait of Hormuz risk premium, extending its rally from yesterday.
Gold held a positive bias below $4,400, with bets on further Fed hikes capping gains ahead of the inflation print, the same ceiling that braked the rally yesterday.
The Japanese yen gave back half of a reported record intervention, while Japanese bond yields increased as oil gains fueled new inflation worries.
The euro stagnated below its 100-day SMA as investors prepared for US CPI.
The Mexican peso surged to a 25-month high, reportedly aiming for 17.00 against the dollar ahead of US CPI.
Scotiabank flags a recovery for the British pound towards 1.36 against the dollar, although the currency reportedly needs a fourth dissenter (from the Bank of England).