Forex Today: The RBA is seen on hold, while a Fed’s rate cut gathers pace

The Greenback flirted with YTD lows near the 102.00 region amidst an intense sell-off in the global markets following reignited concerns over the likelihood that the US economy might tip into recession. While the RBA is expected to keep rates unchanged on Tuesday, speculation of an inter-meeting rate cut by the Fed remains on the rise.

Here is what you need to know on Tuesday, August 6:

The USD Index (DXY) approached the 102.00 region, or multi-month lows, on the back of declining yields and dominating risk aversion. On August 6 comes the Balance of Trade figures along with the RCM/TIPP Economic Optimism Index.

EUR/USD added to Friday’s uptick and briefly surpassed the psychological 1.1000 barrier, losing some momentum afterwards. Retail Sales in the broader euro area and Germany’s Factory Orders are due on August 6, followed by S&P Global Construction PMI in Germany and the euro bloc.

The intense sell-off in risk-related assets sparked a knee-jerk in GBP/USD, which once again revisited the vicinity of 1.2700. On August 6, the BRC Retail Sales Monitor and the S&P Global Construction PMI will be unveiled.

The increasing risk aversion favoured further JPY-buying on Monday, thus sending USD/JPY briefly below the 142.00 region. Household Spending and Average Cash Earnings are expected on August 6.

AUD/USD managed to reverse the initial pullback to 2024 lows near 0.6350, regaining the 0.6500 hurdle and beyond afterwards. The RBA is expected to keep rates unchanged on August 6.

Recession concerns coupled with sluggish demand from China weighed further on sentiment and dragged prices of WTI briefly below the $72.00 mark on Monday.

Some profit taking mood as well as the broad-based sell-off kept Gold prices on the defensive around the $2,400 mark per ounce troy. Silver prices plummeted to a region last seen in early May around $26.50 per ounce.