Forex Today: Dollar recovery pauses ahead of housing data

Here is what you need to know on Tuesday, August 16:

The dollar stays relatively quiet early Tuesday as markets await the next significant catalyst. The US Dollar Index gained more than 1% in the two-day recovery that started on Friday and was last seen moving sideways near 106.50. The European economic docket will feature the ZEW Survey results for the euro area and Germany. In the second half of the day, the US Census Bureau will publish the Housing Starts and Building Permits data for July. Meanwhile, markets remain cautious in the European morning with US stock index futures losing between 0.06% and 0.16%. Finally, the benchmark 10-year US Treasury bond yield stays flat below 2.8%.

Although safe-haven flows dominated the financial markets for the majority of the day on Monday, Wall Street's main indexes managed to close the day modestly higher. China’s state planner National Development and Reform Commission (NDRC) announced multiple measures to avoid recession fears as it said, “We pledge to keep the economy within reasonable bounds.” According to Reuters, the NDRC approved 65 fixed-asset investment projects worth a total of 1.028 trillion yuan from January to July and approved 8 fixed-asset investment projects worth a total of 236.8 billion yuan in July. Nevertheless, the Shanghai Composite Index was flat on the day at the time of press.

AUD/USD lost nearly 100 pips on Monday and failed to stage a rebound. During the Asian session, the Reserve Bank of Australia's (RBA) monetary policy meeting minutes showed that policymakers were ready to take further tightening steps. The RBA, however, reiterated that they were not on a pre-set path. As of writing, the pair was down 0.15% at 0.7015 on the day.

Falling crude oil prices weighed heavily on the loonie on Monday and USD/CAD climbed above 1.2900. Pressured by the worsening demand outlook and prospects of Iranian oil entering the market, the barrel of West Texas Intermediate fell more than 4% on Monday before recovering toward $88.50 on Tuesday. Later in the session, Statistics Canada will release the Consumer Price Index data for July.

Following Monday's steep decline, EUR/USD stays quiet near 1.0150 early Tuesday. 

GBP/USD dropped to its weakest level in more than a week at 1.2035 during the Asian trading hours on Tuesday. Although the pair managed to recover to 1.2050, it's struggling to gather recovery momentum.

USD/JPY fluctuated in a relatively wide range on Monday but closed the day virtually unchanged near 133.50. The pair is having a hard time making a decisive move in either direction early Tuesday. 

Gold suffered heavy losses and dropped toward $1,770 on Monday. With the 10-year US T-bond yield edging lower during the American trading hours, XAU/USD edged slightly higher and steadied near $1,780.

Bitcoin struggled to build on the previous week's gains on Monday and seems to have gone into a consolidation phase at around $24,000 on Tuesday. After having failed to break above $2,000 Ethereum edged lower and was last seen losing 1% on the day at $1,880.