Market Drivers – US Session – Tuesday, August

Mohamed Abdelhamid 31 August, 2022 3:42 am Forex Market, Market Update

The negative market sentiment slightly began to ease early on Tuesday, although investors are generally pessimistic.

The US dollar gave up some gains during the first half of the US session, particularly against high-yielding rivals, but managed to rebound during the second half of the session. The American currency performed higher against most major rivals except for the EUR.

The EUR/USD pair stabilized around 1.0010, higher for a second consecutive day, as bets on a 75 bps rate hike in September continued to increase in Europe. ECB officials expressed their view supporting to move faster with quantitative tightening to contain inflation.

Economic Data

Labour demand showed no signs of cooling as U.S. job openings rose to 11.239 million in July and the prior month was revised sharply higher. JOLTS data increases the traders and investors’ focus on the August non-farm payrolls data due on Friday.

German CPI jumped by 7.9% YoY in August, according to preliminary estimates, while the EU will release inflation figures on Wednesday.

Other Developments

The GBP/USD pair fell to a fresh two-year low of 1.1620, ending the day a handful of pips above the level. Commodity-linked currencies performed poorly due to retreating oil and gold prices.

Crude oil prices fell on news that Iran and the US have reached an agreement on the Iranian nuclear deal that would be announced in two or three weeks. Furthermore, Tehran reported exports had not been affected by political clashes in Baghdad. The barrel of WTI currently trades at $91.70.

USD/CHF is marginally higher and trades around 0.9730, while USD/JPY is little changed on a daily basis hovering around 138.60.

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