Forex Today: Enter the US labour market

The US Dollar (USD) has managed to leave behind the negative start to the week and regained balance on Tuesday. The recovery has come on the back of a generalised recovery in US Treasury yields and ongoing tensions in the geopolitical landscape.

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

The US Dollar Index (DXY) has regained some balance and recovered a big chunk of Monday’s losses, managing to briefly surpass the 99.60 level. The usual MBA Mortgage Applications are due seconded by the more relevant ADP Employment Change, Factory Orders, and the weekly report on US crude oil inventories by the EIA.

EUR/USD has traded on the defensive, slipping back below 1.1600 despite flash inflation data in the Euroland reigniting speculation of an ECB rate hike in September. Next on tap on the domestic docket will be the final S&P Global Services PMI in Germany and the euro zone alongside Producer Prices in the bloc, all due on September 3.

GBP/USD has resumed its decline and returned to the low 1.3500s, quickly forgetting about Monday’s optimism. Absent data releases in the UK tomorrow, the focus of attention is expected to shift to the publication of the final S&P Global Services PMI on September 3.

USD/JPY challenged the area of recent tops past the key 160.00 hurdle, resuming its uptrend and rapidly leaving behind Monday’s hiccup. The Monetary Base figures are due, followed by the speech of the BoJ’s Takada.

AUD/USD has set aside Monday’s decent advance, revisiting the 0.7140/0.7130 band, or multi-day lows. The key Q2 GDP Growth Rate will take centre stage in Oz, seconded by the Ai Group Manufacturing index.

Prices of WTI have built on Monday’s gains and reached fresh two-month highs just cents below the $90.00 mark per barrel in response to a flare-up in US-Iran tensions and increasing supply concerns.

Gold has retreated markedly, coming close to the $4,300 mark per troy ounce and flirting with three-week lows. The better tone in the US Dollar in combination with higher US Treasury yields across the curve has prompted the yellow metal to further extend its multi-day correction.