TRENDING:

XAU/USD

EUR/USD

Forex Today: Profit taking halts dollar’s rally

Valeria Bednarik FXStreet

What you need to take care of on Wednesday, August 24:

The greenback turned south after extending its rally throughout the first half of the day, ending the day down against most major rivals. The catalyst was dismal US data, as the US Services S&P Global PMI contracted to 44.1. At the same time, the manufacturing index expanded at a slower-than-anticipated pace, with the index down to 51.3 from 52.2 in July.

However, S&P Global PMIs for most major economies indicated slowing economic progress and even contraction, indicating it is a global issue. The greenback recovered some ground ahead of Wall Street’s close as risk-off flows continue. The dollar’s decline seems corrective amid extreme overbought conditions. Tepid US data helped investors book some profits, but there are no signs of a trend change.

ECB Executive Board member Fabio Panetta painted a gloomy picture. He said that the central bank might need to adjust the monetary policy further as the probability of a recession increases. Meanwhile, speculative interest is slowly but steadily increasing bets of a US Federal Reserve 75 bps rate hike in September.

GBP/USD hovers around 1.1830, while AUD/USD stands in the 0.6920 region. The USD/CAD pair fell sharply and finished the day at 1.2950.

Safe-haven currencies posted gains vs the greenback, with USD/CHF hovering at around 0.9640 and USD/JPY trading at 136.77.

Gold is currently trading at $1,7477 a troy ounce, up for the day, while crude oil prices extended their latest advance amid market talks suggesting OPEC+ may cut back production. WTI is now at $93.60 a barrel.

The macroeconomic calendar will remain empty in Asia, with the focus on US Durable Goods Orders on Wednesday.

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD bounces off lows, back above 1.3200

After bottoming out near 1.3160, GBP/USD manages to regain a bit of shine and reclaim the 1.3200 mark and beyond at the end of the week. Stronger-than-expected UK Retail Sales data seem to be helping the British Pound limit its losses, while the chaotic UK political environment keeps the bulls at bay for now.

EUR/USD looks consolidative around 1.1460

EUR/USD stages a modest rebound after slipping to a three-month low below 1.1420 at the end of the week. That said, the pair now looks to consolidate humble gains just above 1.1460 despite growing uncertainty surrounding the next round of US-Iran negotiations, which keeps the US Dollar’s downside contained.

Gold slips back to six-day lows, targets $4,100

Gold retreats for the third consecutive day on Friday, eroding gains seen in the first half of the week and approaching the key $4,100 mark per troy ounce. Indeed, the precious metal continues to face headwinds from the Fed's hawkish stance and renewed uncertainty surrounding the next round of US-Iran negotiations.

Breaking: Iran closes the Strait of Hormuz amid ceasefire deal violation

Iran says it is closing the Strait of Hormuz after accusing the United States (US) and Israel of violating the ceasefire. According to Iran, the decision came over the continued Israeli strikes in Lebanon. The Iranian Revolutionary Guard Corps Navy issued a warning to all vessels: "Do not approach the Strait of Hormuz; otherwise, your security will be jeopardized."

The Iran war didn't break the US economy, but what happens next?

Nearly four months after the start of the Iran war, the US economy remains remarkably resilient. While the conflict initially triggered a severe disruption to global energy markets and a sharp rise in Oil prices, recent diplomatic progress between Washington and Tehran has eased concerns about a prolonged supply shock.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.

Forex Today: Profit taking halts dollar’s rally

Broker Reviews

Editor's Picks