Forex Today: Markets shrug off Chinese concerns, top-tier US data awaited
Here is what you need to know on Wednesday, August 4:
Markets are cautiously optimistic despite the spread of coronavirus in China and the ongoing techlash. ADP Nonfarm Payrolls, the ISM Services PMI and a speech by the Fed Vice-Chair stand out. NZD/USD is on the rise while cryptocurrencies are under pressure.
China is facing its worst COVID-19 spread since the disease originated in it back in late 2019. Worries about significant lockdowns somewhat weighed on Asian stocks but S&P 500 futures remain positive. Investors in the region are also worried about Beijing's ongoing persecution of large tech firms, with the current ire focused on the gaming sector.
On the other hand, the Caixin Services Purchasing Managers' Index (PMI) beat estimates with 54.9 points, showing growth expectations remain robust.
The dollar is relatively stable across the board, with NZD/USD standing out with a rise of 0.5% after reporting an increase of 1% in employment and a drop of the unemployment rate to 4%.
ADP's private-sector jobs report is projected to show an increase of around 695,000 in July, similar to 692,000 reported in June. While the figures are not always well-correlated to the official Nonfarm Payrolls figure, it tends to rock markets.
US ADP Employment Change July Preview: Jobs gains in service sector to slowdown
The second significant publication is the ISM Services PMI, which is forecast to remain stable above 60, but could disappoint like the Manufacturing PMI. The Employment component is of high importance, serving as a hint toward Friday's jobs report.
ISM Services PMI Preview: Business psychology begins to deteriorate
Federal Reserve Vice-Chair Richard Clarida is set to speak later in the day, and he could provide hints about how close the bank is to tapering its bond-buying scheme. Last week, the Fed seemed to be in no rush to act.
Bitcoin has been extending its gradual slide, dipping below $38,000, while Ethereum is hovering around $2,500 amid the upcoming change in the way Ether conducts transactions.
Three reasons why Bitcoin can suddenly explode to a new $50K-$65K range
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
