Forex Today: Subdued volatility ahead of this week's key events


Here is what you need to know on Monday, August 21:

Markets started the new week in a quiet manner, with major currency pairs trading near Friday's closing levels. Germany's Bundesbank will publish its monthly report and the US economic docket will feature the Federal Reserve Bank of Chicago's National Activity Index for July later in the day. High-impact data releases and speeches from central bankers at the annual Jackson Hole Symposium will likely ramp up volatility in the second half of the week.

China's central bank, the People’s Bank of China (PBoC), announced in the Asian session that it lowered the one-year Loan Prime Rate (LPR) to 3.45% from 3.55% previous, while keeping the five-year LPRs unchanged at 4.20%. Markets were expecting both rates to be lowered by 15 basis points. Hong Kong's Hang Seng Index is down nearly 2% on the day following the interest rate decisions and the Shanghai Composite Index is losing 1%. In a statement published over the weekend, the PBoC said that "China will coordinate financial support to resolve local government debt problems," per Reuters.

The US Dollar Index (DXY) registered gains for the fifth straight week last week. Early Monday, DXY holds steady at around 103.50. In the meantime, the benchmark 10-year US Treasury bond yield stays near 4.3% and US stock index futures trade flat on the day.

US Dollar price in the last 7 days

The table below shows the percentage change of US Dollar (USD) against listed major currencies in the last 7 days. US Dollar was the strongest against the Australian Dollar.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   0.62% -0.26% 0.78% 1.46% 0.47% 1.19% 0.57%
EUR -0.63%   -0.89% 0.15% 0.84% -0.17% 0.55% -0.05%
GBP 0.26% 0.88%   1.04% 1.72% 0.72% 1.42% 0.83%
CAD -0.78% -0.16% -1.05%   0.69% -0.31% 0.36% -0.21%
AUD -1.48% -0.85% -1.75% -0.70%   -1.01% -0.33% -0.90%
JPY -0.47% 0.14% -0.76% 0.31% 0.96%   0.66% 0.07%
NZD -1.18% -0.55% -1.44% -0.42% 0.30% -0.72%   -0.60%
CHF -0.57% 0.06% -0.82% 0.23% 0.92% -0.08% 0.59%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

 

AUD/USD trades sideways near 0.6400 and NZD/USD consolidates previous week's losses near 0.5900 in the European morning.

EUR/USD registered small losses on Friday and posted its first weekly close below 1.0900 since early July. The pair fluctuates in a tight range above 1.0850 to start the new week.

Despite broad-based US Dollar strength, GBP/USD closed the previous week in positive territory as Pound Sterling benefited from labor market and inflation data. The pair stays relatively quiet and trades below 1.2750 in the early European session on Monday.

USD/JPY declined sharply in the second half of last week but met support near 145.00 on Friday. The pair was last seen trading modestly higher on the day near 145.50.

Pressured by surging US yields, Gold price made a weekly close below $1,900 for the first time in five months. XAU/USD trades in a tight channel at around $1,890 on Monday.

Bitcoin selloff paused over the weekend but BTC/USD lost more than 10% on a weekly basis before going into a consolidation phase near $26,000. Following a modest two-day recovery, Ethereum came under renewed bearish pressure and was last seen losing nearly 1% on the day below $1,700.

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