The Greenback regained strength on Wednesday, reaching two-week highs amidst weakness in risk-linked assets. The US Dollar Index (DXY) continued to climb, flirting with the key 102.00 barrier due to concerns of a possible recession, despite declining US yields. This week’s economic calendar includes key events such as Mortgage Applications, Balance of Trade results, Factory Orders, and the Fed Beige Book.
EUR/USD faced downward pressure as it dropped below 1.1030 following the Greenback’s bounce. The final Services PMI for Germany and the eurozone is expected to be released soon. GBP/USD also experienced a bearish correction, breaking below the 1.3100 support level to hit two-week lows. The final S&P Global Services PMI is scheduled for release on September 4th.
The Japanese yen made a strong comeback, pushing USD/JPY towards the 145.00 zone after four consecutive daily advances. The final Jibun Bank Services PMI will be released on September 4th. AUD/USD plummeted over 1%, nearing the key support level at 0.6700, influenced by a stronger US Dollar, Chinese demand concerns, and weakness in commodities. The Ai Group Industry Index and final Judo Bank Services PMI are expected on September 4th.
WTI prices dropped close to the $70.00 mark per barrel following reports of a potential deal in Libya that could resume local oil production and exports. Gold prices fell below $2,500 per ounce, touching multi-day lows due to the strengthening US Dollar. Silver also experienced a downward trend, falling below $28.00 per ounce to reach three-week lows.
In conclusion, the US Dollar showed strength on Wednesday, reaching two-week highs against a backdrop of weak risk-linked assets. Key economic events such as Mortgage Applications, Balance of Trade results, and PMI releases are expected to impact currency markets in the coming days. Traders should keep an eye on developments in the US Dollar Index and global economic indicators for further insight into market trends.
