It was a lackluster week for the Dollar Index - a measure of the Dollar's strength against a basket of six currencies - as a rebound in the Japanese yen eclipsed the broad-based weakness in other major currencies against the U.S. dollar. The yen was supported by safe have demand and expectations of a rate hike by the Bank of Japan. During the week ended July 26, the U.S. dollar weakened against the Japanese yen and the Swiss franc but held its ground against the euro, the British pound, the Australian dollar, the Canadian dollar and the Swedish Krona.

The Dollar Index or the DXY slipped 0.08 percent during the week ended July 26 as it closed at 104.32 versus 104.40 a week earlier. The week's trading range was a bit wider ranging from the high of 104.56 recorded on Wednesday and the low of 104.08 recorded on Thursday.

Data released by the U.S. Bureau of Economic Analysis on Thursday revealed a growth of 2.8 percent during the second quarter, that boosted the Dollar. Markets had expected the second quarter's growth to rise to 2 percent from 1.4 percent in the previous period.

In data released on Friday, the U.S. Bureau of Economic Analysis showed the year-on-year PCE price index edging down as expected to 2.5 percent in June from 2.6 percent in the previous period. The core component thereof which was also seen edging down to 2.5 percent however remained steady at 2.6 percent. The month-on-month PCE price index edged up to 0.1 percent as expected. The core component thereof which was seen steady at 0.1 percent edged up to 0.2 percent. Nevertheless, the assessment that the U.S. economy was firmly on the path of disinflation reinforced hopes of a Fed rate cut in September and limited greenback's gains.

The EUR/USD pair slipped 0.18 percent during the week ended July 26 amidst an unexpected decline in both manufacturing PMI and services PMI. The HCOB Manufacturing PMI which was seen rising to 46.1 edged down to 45.6 from 45.8 in June. The HCOB Services PMI unexpectedly declined to 51.9 whereas markets had expected it to rise to 53 from 52.8 in June. The pair closed at 1.0857 on July 26 versus 1.0877 a week earlier. The euro's moves that ranged between a weekly high of 1.0904 and a weekly low of 1.0826 came amidst expectations that the European Central Bank would resume rate cuts in September.

The sterling too slipped 0.36 percent against the greenback during the week ended July 26. The GBP/USD pair slipped to 1.2872 from 1.2919 a week earlier amidst expectations of a 50-basis points rate cut by the Bank of England in its decision to be announced on August 1. Data released during the week showed a more-than-expected uptick in manufacturing PMI and a less-than-expected increase in services PMI. The weekly trading range for the pair was between the high of 1.2944 recorded on Monday and the low of 1.2849 touched on Thursday and Friday.

The Australian dollar tumbled more than 2 percent against the U.S. dollar during the week ended July 26 amidst a global sell-off in risky assets and weak data from China. The AUD/USD pair which had closed at 0.6682 on July 19 slipped to 0.6548 by July 26. The pair ranged between the high of 0.6704 recorded on Monday and the low of 0.6514 recorded on Thursday. Data released during the week showed manufacturing PMI edging up and services PMI edging down.

The Japanese Yen's rebound was the most significant influence on the Dollar Index during the week ended July 26. Ahead of the Bank of Japan's interest rate review that would be known on Wednesday, market speculations of a rate hike and tapering in bond purchases lifted the yen. With an index weight of 14 percent, the yen's 2.4-percent surge against the Dollar alone dragged down the dollar index by more than 0.33 percent. The USD/JPY pair slipped 2.4 percent as it plunged to 153.72 from 157.49 a week earlier. The weekly trading range for the pair was between the high of 157.63 touched on Monday and the low of 151.94 recorded on Thursday.

Markets are eagerly waiting for the Fed's interest rate decision as well the outcome of the Bank of Japan's decision that would be known on Wednesday. Amidst the anxiety triggered by renewed geopolitical tensions in the Middle East, the DXY has jumped to 104.60 whereas the USD/JPY pair has increased to 153.97. Ahead of the inflation readings from Australia due on Tuesday, the AUD/USD pair is at 0.6538. The common currency has declined to 1.0819. The GBP/USD pair has weakened to 1.2847 ahead of Thursday's interest rate decision to be announced by the Bank of England.