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Forex Today: Dollar remains strong ahead of more jobs data

Early on Wednesday, New Zealand is scheduled to release its Q2 employment report, while later in the day, Australia's AiG PMI is due. The highlight of the day will be the release of the ADP employment report.

Here is what you need to know on Wednesday, August 2:

On Tuesday, US stocks finished mixed, with the Dow Jones up by 0.20% and the Nasdaq down by 0.43%. US Treasury yields rose, with the 10-year reaching levels above 1.40%.

Economic data from the US came in mixed.  JOLTS Job Openings and the ISM Manufacturing PMI below expectations. The US Dollar Index rose 0.35% on the day, after trimming gains during the American session. The Greenback rose across the board and remains strong. On Wednesday, the ADP employment report is due, which could be a preview for Friday's Nonfarm Payrolls.

The Euro outperformed during the American session, with EUR/USD rebounding from above 1.0950 towards 1.1000. The pair still holds a bearish bias, but the Dollar's momentum has faded.

GBP/USD posted its lowest daily close in three weeks,  below 1.2800, and continues to move with a bearish bias. On Thursday, the Bank of England will announce its decision on monetary policy, with a rate hike expected.

USD/JPY rose sharply for the third consecutive day, breaking above 143.00, the highest level seen since July 7. The Yen continues to be among the worst performers amid higher yields and the latest developments regarding the Bank of Japan.

The Australian dollar lagged on Tuesday after the Reserve Bank of Australia (RBA) opted to keep its key interest rate unchanged at 0.10%. The RBA offered a pessimistic assessment of the economic outlook but kept the door open to more rate hikes. AUD/USD dropped to test the key support area of 0.6600. It remains under pressure, and a break lower could trigger more losses.

NZD/USD gave up Monday's gains, pulling back to the 0.6150 area. New Zealand will report Q2 labor market data early on Wednesday. The unemployment rate is expected to rise modestly to 3.5%, and employment growth is expected to have stayed strong during the quarter at a 0.5% rate. The labor cost index is expected to have risen at a 4.5% annual rate. The numbers are unlikely to be a game-changer for the Reserve Bank of New Zealand, but a surprisingly positive report could add pressure to the central bank.

USD/CAD rose after many days of trading sideways, breaking above 1.3250. While above that level, more gains seem likely, but the currency is facing resistance at 1.3300.

It was a bad day for metals. Gold lost $30 from Monday's highs and bottomed around $1,940, while Silver tumbled 1.80%, ending the day near $24.30. Crude oil prices rose again, with WTI hitting fresh highs above $82.00. 


 


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Author

Matías Salord

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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