The main focus of the market this week was the latest US inflation report published in the New York session on Tuesday.
Investors were surprised when the annual reading of the consumer price index (CPI) for June rose to 2.7%, showing the highest inflation rate in 5 months.
The figure was higher than the forecast of 2.6% and the reading recorded in May which was 2.4%.
This has led to a significant strengthening of the US dollar as soon as the data was published after the slow movement shown since the opening of the week.
The US dollar strengthened to a new 3-week high against the Euro and Pound, while against the Yen, the US dollar reached a 15-week high.
The increase in inflation rates in the US also gives the impression that the Federal Reserve (Fed) is likely not to rush to lower interest rates and maintain its existing policy.
The situation was also exacerbated by the response of President Donald Trump, who was clearly not happy with the central bank's decision to not continue further interest rate cuts.
He continued to double down on his calls for interest rates to be lowered immediately after his repeated threats to remove Fed Chairman Jerome Powell.
Also published in the New York session yesterday was the Canadian inflation report which met the forecast for the monthly CPI reading in June at 0.1%.
Today's focus (Wednesday) will be on the UK CPI data in the European session while in the New York session, the US producer price index (PPI) data will be given attention to assess whether the reading published is in line with yesterday's US CPI.
