Here is what you need to know on Wednesday, August 31:

Markets remain relatively muted mid-week as investors await the inflation data from the euro area. In the second half of the day, the ADP's new employment report for the private sector will be featured in the US economic docket. In the early European morning, US stock index futures are up more than 0.5% and the benchmark 10-year US Treasury bond yield holds steady at around 3.1%. After having closed the second straight day virtually unchanged on Tuesday, the US Dollar Index continues to move sideways below 109.00.

ADP Jobs Preview: Three reasons to expect the data to drive the dollar higher.

Earlier in the day, the data from China showed that the NBS Manufacturing PMI edged higher to 49.4 in August from 49 in July. Additionally, the Non-Manufacturing PMI arrived at 52.6, bettering the market expectation of 52.2. Despite the upbeat data, the Shanghai Composite Index was last seen losing nearly 1% on a daily basis. Investors grow increasingly concerned over a long-lasting slowdown in the Chinese economy after authorities decided to impose tougher coronavirus-related restrictions in cities including Shenzen, Chengdu and Dalian.

EUR/USD managed to hold above parity and registered small daily gains on Tuesday. The Annual Harmonised Index of Consumer Prices (HICP) in the euro area is expected to rise to 9% in August's flash estimate from 7.9% in July. Several European Central Bank (ECB) policymakers voiced their willingness to consider a 75 basis points rate hike in September and helped the shared currency stay resilient against its rivals. Meanwhile, with the Nord Stream pipeline shutting down for maintenance for three days, gas flows to Europe got fully halted and natural gas futures rose as much as 5% in the European morning. As of writing, EUR/USD was trading modestly higher on the day at 1.0020.

Eurozone Inflation Preview: Hotter HICP to cement a 75 bps ECB hike next week.

With crude oil prices falling nearly 5% on Tuesday, the USD/CAD pair gathered bullish momentum and climbed to the 1.3100 area before going into a consolidation phase below that level on Wednesday. Statistics Canada will release the second-quarter Gross Domestic Product (GDP) data later in the session, which is expected to show that the Canadian economy expanded at an annualized rate of 4.5% in the second quarter.

GBP/USD registered its lowest daily close since March 2020 at 1.1655 on Tuesday. The pair erased a portion of its daily losses early Wednesday but it continues to trade below 1.1700.

USD/JPY started to stretch lower following Tuesday's failed attempt to break above 139.00. The pair trades in negative territory below 138.50 in the European morning. "Bank of Japan decided to maintain its easy policy bias at July meeting, hope to discuss at September policy meeting whether it should continue doing so based on data available at the time," BOJ monetary policy board member Junko Nakagawa said earlier in the day.

Gold lost nearly 0.8% on Tuesday as the 10-year US T-bond yield held comfortably above 3%. XAU/USD is having a tough time reversing its direction and was last seen posting small daily losses at around $1,720.

Bitcoin failed to build on Monday's gains and lost more than 2% on Tuesday. Nevertheless, BTC/USD holds above $20,000 so far on Wednesday. Despite having closed in the red on Tuesday, Ethereum regathered its bullish momentum and was last seen rising nearly 4% on the day near $1,600.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD is having a difficult time gathering bullish momentum and fluctuating at around 1.0350 in the American session. With Wall Street's main indexes pushing lower after the opening bell, the US Dollar is gathering strength and not allowing the pair to gain traction.

EUR/USD News

GBP/USD falls below 1.2000 as mood sours

GBP/USD falls below 1.2000 as mood sours

GBP/USD has turned south and declined below 1.2000 in the second half of the day on Tuesday. The negative shift witnessed in risk sentiment seems to be helping the US Dollar find demand and forcing the pair to stay on the back foot.

GBPUSD News

Gold retreats to $1,750 area as US yields edge higher

Gold retreats to $1,750 area as US yields edge higher

Gold price lost its traction during the American trading hours and retreated to the $1,750 area. The benchmark 10-year US Treasury bond yield is up 1% on the day slightly above 3.7%, not allowing XAU/USD to build on earlier gains.

Gold News

Bitcoin price hears jingle bells rolling in

Bitcoin price hears jingle bells rolling in

Bitcoin price looks set to rally substantially higher now that the social unrest in China is calming down. BTC could stage a 17% rally in the coming week.

Read more

Alibaba shares advance 5% on reduced China covid restrictions

Alibaba shares advance 5% on reduced China covid restrictions

BABA stock has jumped more than 5.2% in Tuesday’s premarket to $80 after China's National Health Commission said covid-related lockdowns should end as soon as possible. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures