USD Continues to Climb, What Happened?

<p>&nbsp;The US dollar continued strengthening in the European session after exhibiting a horizontal movement during the previous session.</p><p><br /></p><p>The dollar index, which measures the strength of the greenback, is trading higher around the 101.00 price level against most major currencies.</p><p><br /></p><p>Meanwhile, the yen fell further towards the 142.00 level, even after data showed core inflation across Japan rose 3.3% in June.</p><p><br /></p><p>It was in line with market expectations, but remained above the Bank of Japan's (BOJ) target of 2%.</p><p><br /></p><p>The main factor behind the drop was reports that the BOJ is likely to remain on its loose policy approach at next week's meeting.</p><p><br /></p><p><br /></p><p>Meanwhile, the Aussie and New Zealand dollars also edged lower, slipping to around 0.6750 and 0.6195 against the greenback respectively.</p><p><br /></p><p>However, the euro is not seen to change much with the price seen to be stable at around 1.1130 against the US dollar.</p><p><br /></p><p>The pound slipped slightly, failing to capitalize on a better-than-expected reading of UK retail sales data in June.</p><p><br /></p><p>The meeting of the three central banks will decorate the trade next week, where the decision of the Federal Reserve (Fed) will be the main focus of investors.</p><p><br /></p><p>For now, investors are still looking at expectations for a 25 basis point interest rate hike, but it is uncertain whether the Fed will implement another hike after that.</p>