Dollar gains as data allow the Fed to stay in wait-and-see modeUS and EU secure trade deal, tariff clock is ticking for othersWall Street at record highs amid trade optimism and better earningsPound slides after retail sales, yen retreats even as BoJ hike bets increaseDollar Rebounds as Fed Seen In No Rush to Cut RatesThe US dollar gained against most of its major counterparts on Friday and began this week on the front foot, perhaps as recent data corroborated the notion that the Fed should not rush into cutting interest rates further.Last week, the flash PMIs revealed that US economic activity grew at a distinctly faster pace in July compared to June, with the composite PMI rising to 54.6 from 52.9. Although the manufacturing index slumped to a seven-month low, dropping below the boom-or-bust zone of 50, the services index jumped to a seven-month high, with price pressures intensifying across both sectors.According to the Chief Business Economist of S&P Global, the data pointed to outperformance of business output growth among the four largest developed economies.This reinforced market expectations that the Fed will remain sidelined at Wednesday’s decision, with only a 65% chance of a 25bps interest rate cut in September still pencilled in.Trump-Powell Saga, Trade Deals and August 1 DeadlineHowever, with the US securing another deal on trade today, this time with the EU, US President Trump may not be very happy with Powell reiterating the view that patience is the wisest choice for now. After all, several policymakers have cited risks of tariff-induced inflation for preferring to keep rates high for longer. But the latest trade deals, especially with Japan and the EU, may have eased such risks, and thus, delayed action by the Fed could anger Trump even more.Therefore, it is hard to envision a long-lasting recovery for the US dollar, even if the Fed highlights patience once again and allows for some further dollar recovery. Renewed attacks by Trump against Powell will leave investors continuing to question the Fed’s independence, and thus downside risks for the US dollar are likely to remain.What’s more, Friday is August 1, the deadline for other nations to agree on trade with the US. If no new deals are announced, nor an extension for those who are willing to continue negotiating, massive tariffs could prompt investors to sell America once again, thereby abandoning not only US stocks and bonds, but also the US dollar.Wall Street Celebrates EU-US Deal; Big-Tech Earnings AwaitedOn Wall Street, all three of the main indices closed in positive territory, with both the S&P 500 and the Nasdaq hitting fresh record highs and the Dow Jones ending the week 0.25% shy of its all-time closing level that was achieved on December 24.Following the EU-US trade accord, stock futures are pointing to fresh records for all three indices, with investors now locking their gaze to talks between the US and China in Sweden. Several media have already reported that the world’s largest economies are willing to extend their truce and hold more negotiations in order to arrive to a more permanent consensus.This could further boost risk appetite, especially if earnings results continue to come in better than expected. Following Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA), four more of the Magnificent 7 companies report their results this week, leaving Nvidia (NASDAQ:NVDA) for August 27. On Wednesday, Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META) will publish earnings after the closing bell, while on Thursday, it will be the turn of Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).Pound and Yen Extend Their RetreatsElsewhere, the pound dropped on Friday after the UK retail sales numbers for June came in softer than expected. This encouraged market participants to raise the probability of a rate cut at the BoE’s upcoming decision to 86%.The yen is also being hammered the last few trading sessions, despite the US-Japan trade deal increasing the probability of another rate hike by the BoJ this year. Perhaps the weakening hand of PM Ishiba following the elections in the upper house of Parliament is a signal that subsequent hikes will come much later and at a very slow pace.