Forex Today: Dollar picks up bearish pace

Valeria Bednarik FXStreet

What you need to take care of on Tuesday, August 2:

The greenback edged lower on Monday, although the slide pared mid-US session as Wall Street lost its earnings-inspired strength and lost some ground. Market participants remained focused on the risk of a global recession.

At the beginning of the day, China published the official NBS Manufacturing PMI, which contracted to 49 in July, worse than anticipated, while the services index came in better than expected, improving to 53.8. Also, S&P Global downwardly revised its Manufacturing PMIs for some European countries and the US.

The US July ISM Manufacturing PMI fell by less than anticipated, down from 53 in June to 52.8. A sharp drop in prices paid hints at easing inflationary pressures, but new orders also contracted, according to ISM, in line with increased risks of a recession.

The yield on the 10-year US Treasury note ticked lower and is currently around 2.59%, while the 2-year note yields 2.89%, unchanged for the day.

The EUR/USD pair neared the 1.0280 area again, finishing the day at 1.0255. GBP/USD extended gains beyond 1.2200, now changing hands at 1.2250. The AUD/USD pair trades above 0.7000 as market players await the RBA monetary policy decision. The central bank is widely anticipated to hike rates by 50 bps, although it is unclear if they can hike by more or less.

USD/CAD surged amid lower oil prices, ending the day at 1.2845. Crude oil prices edged lower, losing roughly 4% on Monday amid fears of easing demand, following weaker than expected Chinese figures released at the beginning of the day. WTI settled at $93.80 a barrel.

Gold continued to advance, reaching an intraday high of $1,775.43 a troy ounce, trading nearby early in the Asian session.

Safe-haven currencies advanced against the greenback. USD/CHF trades around 0.9500 while USD/JPY ended the day at 131.65.

Bitcoin Price Prediction: “Anything too clean is probably dirty”

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.