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The US Dollar experienced a rollercoaster session on Wednesday, swinging between gains and losses before ultimately surrendering its early advances. This indecisive trading behavior stemmed from persistent worries over the Federal Reserve’s independence and a lack of significant progress in ongoing trade negotiations, leaving investors on edge as the day wrapped up.
Looking ahead to Thursday, August 28, market participants will keep a close eye on several key indicators. The US Dollar Index (DXY) retreated to the lower 98.00s by the end of the North American session, erasing an initial surge to three-day highs near 98.80. The spotlight will shine on the second revision of the Q2 GDP Growth Rate, complemented by the standard weekly Initial Jobless Claims and Pending Home Sales data, which could provide fresh insights into the US economy’s health.
In the eurozone, EUR/USD shook off sharp early declines to close nearly flat around the 1.1630 level. Attention turns to upcoming releases, including euro area Consumer Confidence and Consumer Inflation Expectations. Additionally, the European Central Bank (ECB) will release the minutes from its most recent meeting, offering potential clues on monetary policy directions.
Across the pond, GBP/USD built on its rebound from Tuesday, once again testing the 1.3500 threshold. On the UK docket for August 29, the Nationwide Housing Prices report emerges as the next focal point, which could influence sentiment around the British pound amid broader economic uncertainties.
Meanwhile, USD/JPY picked up renewed momentum, scaling three-day peaks above 148.00 despite the dollar’s overall subdued performance and falling US yields. In Japan, investors await the weekly Foreign Bond Investment data, along with a speech from Bank of Japan (BoJ) official Nakagawa, which might shed light on future policy moves.
Down under, AUD/USD continued its upward trajectory, pushing past the 0.6500 mark. Australian markets will see the release of quarterly Private Capital Expenditure figures, potentially impacting the Aussie’s direction in the near term.
In commodities, West Texas Intermediate (WTI) crude oil staged a recovery after Tuesday’s sharp drop, climbing above $64.00 per barrel. Traders stayed alert to geopolitical tensions and the possibility of new tariffs on India, while a positive inventory report from the Energy Information Administration (EIA) bolstered the bounce-back.
Precious metals also drew attention amid the dollar’s fluctuations and contracting yields. Gold extended its weekly gains, approaching the critical $3,400 per troy ounce milestone. Silver, after dipping to three-day lows, steadied itself and returned to the $38.50 per ounce area, reflecting a mixed but resilient performance in the sector.
