Forex Today: RBA surprises again, US Dollar benefits from souring mood

Here is what you need to know on Tuesday, August 1:

The Australian Dollar is the worst performing major currency on the first day of August following the Reserve Bank of Australia's (RBA) dovish surprise. Ahead of the ISM Manufacturing PMI and JOLTS Job Openings data from the US, the US Dollar benefits from the risk-averse market environment and gathers strength. The European economic docket will feature Unemployment Rate data for June. 

The RBA announced earlier in the day that it left the policy rate unchanged at 4.1%, against the market expectation for a 25 basis points hike. In the policy statement, the RBA explained that the decision to hold rates unchanged would provide them more time to assess the impact of policy tightening to date and the economic outlook. "Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon the data and the evolving assessment of risks," the RBA further noted.

AUD/USD came under heavy bearish pressure following the RBA event and was last seen losing more than 1% on the day at around 0.6650.

During the Asian trading hours, the data from China revealed that the economic activity in the manufacturing sector contracted in June, with the Caixin Manufacturing PMI dropping to 49.2 from 50.5. Reflecting the souring market mood, US stock index futures trade modestly lower in the European session. Meanwhile, the 10-year US Treasury bond yield holds steady slightly below 4%.

Pressured by the renewed USD strength, EUR/USD turned south and dropped below 1.1000 in the European morning on Tuesday. HCOB will publish revisions to July Manufacturing PMI for the Eurozone and Germany.

GBP/USD closed the first day of the week virtually unchanged slightly below 1.2850. The pair stays relatively quiet early Tuesday and fluctuate at around 1.2830.

USD/JPY builds on Monday's gains and trades at its highest level in three weeks above 142.50. 

Gold price stays under bearish pressure following the disappointing Chinese PMI data. At the time of press, XAU/USD was down 0.5% on the day at $1,955.

Bitcoin broke below its consolidation channel and touched its lowest level since late June below $28,500 before staging a rebound toward $29,000 in the European session. After closing the second straight day in negative territory on Monday, Ethereum extended its slide and came within a touching distance of $1,800 during the Asian trading hours. ETH/USD was last seen losing more than 1% on the day at $1,830.