Forex Today: Japanese GDP figures and China’s trade results in the limelight

The US Dollar (USD) has started the week on the back foot, rapidly leaving behind Friday’s uptick and refocusing on the downside. That said, the Greenback has also challenged three-day lows as investors appear to have already digested the firmer results from NFP while slowly shifting their attention to Friday’s crucial US inflation data.

Here is what you need to know on Tuesday, September 8:

The US Dollar Index (DXY) has resumed its decline and come back to test the area of multi-day troughs below the 99.00 contention line amid a marked downward trend. The NFIB Business Optimism Index is due, seconded by the ADP Employment Change Weekly and Consumer Inflation Expectations.

EUR/USD has kept its business in the upper end of its recent range beyond 1.1600, propped up by fresh selling interest hurting the US Dollar. The Balance of Trade results in Germany will take centre stage in the domestic data space alongside the speech by the ECB’s Elderson.

GBP/USD has followed the rest of its risk-linked peers and started the week in an upbeat tone, although gains appear to have met a solid resistance around 1.3550. The BRC Retail Sales Monitor will be the sole release across the Channel.

Further repricing of additional tightening by the BoJ has given the Japanese Yen a fresh boost, sending USD/JPY to new seven-month lows near the 154.00 level. The always-important Average Cash Earnings are due seconded by the Current Account balance, Bank Lending figures and key final Q2 GDP Growth Rate.

AUD/USD has added to its multi-week positive streak and has visited levels last seen in mid-May above 0.7220. The Westpac’s Consumer Confidence index comes next, seconded by Private House Approvals, Building Permits, the NAB’s Business Confidence gauge and speeches by the RBA’s Hunter and Hauser.

USD/CNH has slipped back to and bounced off levels last traded in January 2023 near the 6.7000 level, reversing three consecutive daily pullbacks, although it is retreating for the third month in a row. The Balance of Trade data will be the salient event on the Chinese calendar.

Prices of WTI confronted three-month tops above the $93.00 mark per barrel amid increasing tensions in the US-Iran conflict.

Gold traded with modest losses just above the $4,400 mark per troy ounce amid persistent caution ahead of the US inflation figures due on Friday. In addition, Fed rate hike bets have also weighed on the yellow metal as market participants continued to assess Friday’s US Nonfarm Payrolls data.