Forex Today: Dollar hold its ground following last week's upsurge

Eren Sengezer FXStreet

Here is what you need to know on Monday, August 22:

The greenback preserves its strength to start the week after having registered impressive gains against its rivals last week. The US Dollar Index rose 2.3% to post its biggest one-week gain last week and was last seen trading modestly higher on the day at around 108.20. The Federal Reserve Bank of Chicago's National Activity Index for July will be featured in the US economic docket and Statistics Canada will release the New Housing Price Index data. In the absence of high-impact data releases, investors will also keep a close eye on risk perception. In the early European session, US stock index futures were down between 0.45% and 0.65%.

Although markets are yet to make up their mind about the size of the September Fed rate hike, Reuters reported that only 18 of 94 economists surveyed in a recent poll expected the US central bank to opt for a 75 basis points (bps) rate hike. Nevertheless, the CME Group FedWatch Tool shows that markets are pricing in a 48.5% probability of a 75 bps rate increase next month.

During the Asian trading hours, the People's Bank of China announced that it lowered the one-year loan prime rate (LPR) and the five-year LPR by 5 basis points and 13 points, respectively to 3.65% and 4.3%. This dovish step taken by the Chinese central bank helped the AUD and NZD stay resilient against the USD at the beginning of the week. As of writing, the NZD/USD pair was up 0.53% on the day at 0.6200 and the AUD/USD pair was up 0.42% at 0.6900.

EUR/USD is struggling to stage a recovery following last week's sharp decline and trading below 1.0050. According to several news outlets, Russia plans to shut down the Nord Stream gas pipeline for three days for maintenance at the end of the month.

GBP/USD lost nearly 300 pips last week and continues to trade on the back foot within a touching distance of 1.1800.

USD/JPY consolidates last week's gains and trades in a relatively tight channel at around 137.00 early Monday.

Gold registered losses for five straight days and stays under modest bearish pressure in the European morning on Monday. At the time of press, XAU/USD was trading in negative territory slightly above $1,740.

After having suffered heavy losses last Friday, Bitcoin recovered modestly over the weekend but struggled to gather bullish momentum. BTC/USD trades in negative territory below $21,500 on Monday. Ethereum is down more than 2% on the day, continuing to push lower toward $1,500.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.