Forex Today – Asian Session: Euro Pain Means Dollar Gains

What to watch for on Wednesday, September 7:

The dollar extended its winning streak, ending Tuesday higher against most of its main rivals. The euro and yen were the worst performers, falling to multi-year lows against their US rival. EUR/USD once traded at 0.9863, and is now hovering around 0.9900, while USD/JPY trades a handful of pips below 143.07, a level last seen in 1998.

The weakness of the common currency is directly related to the conflict with Russia, since the latter cut off all gas supplies to the Old Continent. Western countries continue to try to put a cap on Russian oil.

GBP/USD is also under pressure but ended the day little changed around 1.1510. The Prime Minister of the United Kingdom, Liz Truss, has announced an energy rescue to face the crisis that affects all of Europe. Truss proposed freezing some 130 billion pounds in household energy bills, while considering another 40 billion pounds for small businesses.

The Australian dollar was the weakest commodity-linked currency, with AUD/USD dipping to 0.6730 after the Reserve Bank of Australia hinted it would slow the pace of gains. The country will release second-quarter gross domestic product early on Wednesday.

USD/CAD hovers around 1.3150, helped by weakening crude prices. WTI is currently trading at $86.80 a barrel.

Spot gold is trading around $1,700 a troy ounce.

US data unexpectedly beat expectations as the US Services PMI advanced to 56.9 in August, also beating market expectations. Government bond yields soared, with the 10-year Treasury yield currently trading at 3.34%.

Wall Street wavered between gains and losses throughout the session, but eased before the close. Major indices closed in the red, even though their European counterparts were able to post modest gains.