On Tuesday, August 20, major currency pairs have shown signs of stabilization in the European morning as investors await pivotal economic data and comments from Federal Reserve (Fed) officials. Eurostat is set to release revised inflation data for July, while Statistics Canada will publish the Consumer Price Index (CPI) for the same month later today.
The US Dollar (USD), which began the week under bearish pressure, continued its decline against major currencies on Monday afternoon. This drop follows bullish trends on Wall Street, reflecting an improving risk sentiment. US stock index futures are slightly higher early in the European session, and the USD Index remains steady just below 102.00.
The EUR/USD pair rose by 0.5% on Monday, marking its highest level since late December near 1.1090. The pair is consolidating around 1.1080 early Tuesday. The European Central Bank (ECB) is expected to release Negotiated Wage Rates data for Q2 later today.
In Asia, the People’s Bank of China (PBoC) maintained the one-year and five-year Loan Prime Rates (LPRs) at 3.35% and 3.85%, respectively, in line with market expectations.
Minutes from the Reserve Bank of Australia’s (RBA) August meeting revealed that while members considered raising rates, they opted to keep them steady to balance risks. The RBA indicated that rates might need to remain unchanged for an extended period. The AUD/USD pair, which climbed nearly 1% on Monday to reach a one-month high, has slightly retreated to above 0.6700. Meanwhile, the NZD/USD continues to rise, hitting a six-week high around 0.6130.
Canada’s inflation rate is projected to decline to 2.5% year-over-year in July, down from 2.7% in June. USD/CAD is trading marginally lower near 1.3620 early Tuesday, following a 0.3% drop on Monday.
GBP/USD extended its rally to reach 1.3000, its highest level in over a month, during the Asian trading hours on Tuesday. The pair is trading just below this level as the European session begins.
USD/JPY recovered slightly from a two-week low on Monday but ended the day in negative territory. The pair is edging towards 147.00 in the European morning.
Gold prices corrected lower to $2,480 on Monday but rebounded to close above $2,500. Early Tuesday, XAU/USD is fluctuating around $2,505 within a narrow range.
