During the Asian session, the Reserve Bank of New Zealand will announce its monetary policy decision and RBA Governor Lowe will deliver a speech. The key event of the day, however, will be the release of the June US CPI, which is likely to trigger volatility across financial markets.

Here is what you need to know on Wednesday, July 12:

The US Dollar weakened on Tuesday ahead of key US data and amid risk appetite. On Wall Street, the Dow Jones gained 0.93% and the Nasdaq rose 0.55%. Gold rose to $1,940, while Silver finished flat around $23.10. Crude oil prices rose more than 2%.

The improvement in risk sentiment weighed on the US Dollar. The DXY dropped for the fourth consecutive day and closed at 101.65, the lowest in two months.

Price action remained limited as market participants awaited the release of crucial US data. The release of the US Consumer Price Index (CPI) for June will be the critical event. The index is expected to show a 0.3% monthly increase and a decline in the annual rate from 4% to 3.1%; and the core annual rate from 5.3% to 5%. The data will likely trigger volatility across financial markets and will be critical for Federal Reserve expectations for the July 25-26 FOMC meeting.

The EUR/USD pair hit a fresh high at 1.1025 and then pulled back modestly, ending the day above 1.1000. The key driver continues to be the weaker US Dollar.

GBP/USD reached fresh 15-month highs above 1.2900 and rose again. Labor data from the UK was mixed, with the unemployment rate rising to 4.0% in May, while wage growth rose 6.9% YoY, marking a new high.

USD/JPY slid further and approached 140.00, even as US yields remain steady and despite risk appetite. A higher-than-expected US inflation reading could boost the pair on Wednesday.

AUD/USD remained in range, moving below 0.6700 and supported by 0.6600. On Wednesday, Reserve Bank of Australia Governor Lowe will deliver a speech following the decision of the central bank to keep rates unchanged last week.

USD/CAD resumed its decline and fell below 1.3250, under the 20-day Simple Moving Average (SMA). The Bank of Canada is expected to announce its interest rate decision, and a 25 basis point hike to 5% is expected. The BoC will likely keep its forward guidance open-ended.

NZD/USD found resistance again at the 0.6220 area and pulled back, below 0.6200. The Reserve Bank of New Zealand will announce its decision on Wednesday. The central bank is expected to keep rates unchanged for the first time in more than a year.