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The US Dollar (USD) gained ground on Tuesday as market participants adopted a cautious stance ahead of several key events, including Wednesday’s release of the Federal Open Market Committee (FOMC) Minutes and the highly anticipated Jackson Hole Symposium later in the week. Heightened geopolitical tensions also contributed to the safe-haven appeal of the Greenback.
Key Events to Watch on Wednesday, August 20:
US Dollar Index (DXY): The DXY rose to around 98.30 despite a general decline in US bond yields. The primary focus for the day will be the FOMC Minutes, which could provide further insight into the Federal Reserve’s future policy path. Other US data releases include weekly MBA Mortgage Applications and the EIA’s report on crude oil supplies. Speeches by Fed members Waller and Bostic are also on the calendar.
EUR/USD: The pair continued its modest retreat, remaining below the 1.1700 level. The final Inflation Rate for the Eurozone, along with the flash Q2 Labour Cost Index, will be the main data points to watch.
GBP/USD: The Pound fell to multi-day lows, breaching the 1.3500 support level. The release of the crucial UK inflation data will be the most significant domestic event for the currency.
USD/JPY: The pair gave back some of its recent gains, retreating to the mid-147.00s after briefly touching a high above 148.00. Upcoming Japanese data includes the Balance of Trade and Machinery Orders.
AUD/USD: The Australian dollar continued to weaken, reaching a three-week low near the 0.6450 zone. Traders will be looking at the latest Consumer Inflation Expectations and speeches from Reserve Bank of Australia (RBA) officials Connolly and McPhee.
Commodities: Crude oil prices extended their decline, falling below the $62.00 per barrel mark for American WTI as geopolitical tensions eased. Gold and silver also saw significant losses, with gold falling to $3,315 per troy ounce and silver dropping to multi-day lows near $37.00 per ounce, a move attributed to the US dollar’s strength and a drop in US yields.
