What to watch for on Tuesday, August 2:
The USD was lower on Monday, although the decline was reduced in the middle of the American session, as Wall Street lost its gains-inspired strength and lost some ground. Market participants remained focused on the risk of a global recession.
Earlier in the day, China released the official NBS manufacturing PMI, which contracted to 49 in July, worse than expected, while the services index came out better than expected, improving to 53.8. In addition, S&P Global revised downwards the manufacturing PMIs of some European countries and the United States.
The US manufacturing PMI for July fell less than expected, falling from 53 in June to 52.8. The sharp drop in prices paid points to easing inflationary pressures, but new orders also contracted, according to the ISM, in line with rising recession risks.
The 10-year US Treasury yield is down and is currently around 2.59%, while the 2-year Treasury yield is trading at 2.89%, unchanged on the day.
The EUR/USD pair again approached the 1.0280 area, ending the day at 1.0255. The GBP/USD pair extended its gains beyond 1.2200, now changing hands at 1.2250. The AUD/USD pair is trading above 0.7000 as market players await the RBA’s monetary policy decision. The central bank is expected to raise rates by 50 basis points, although it is unclear whether it can go higher or lower.
USD/CAD rose amid falling oil prices and ended the day at 1.2845. Oil prices edged lower and lost about 4% on Monday on fears that demand will shrink, after weaker-than-expected Chinese figures were released earlier in the day. WTI stood at $93.80 a barrel.
Gold continued to advance and reached an intraday high of $1,775.43 a troy ounce, trading in the vicinity early in the Asian session.
Haven currencies advanced against the dollar. USD/CHF is trading around 0.9500, while USD/JPY ended the day at 131.65.
Source: Fx Street

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