Forex Today: Dollar Holds Firm as Focus Turns to ADP Jobs Data

This is what you need to know to trade today Wednesday August 2:

The US dollar remains strong through mid-week as market sentiment remains cautious. US stock index futures are down between 0.35% and 0.75% by early European morning, while the Dollar Index (DXY) is holding on to modest daily gains above 102.00. ADP will publish private sector employment data for the month of July to kick off the American session.

ADP Jobs Preview: Could a Weaker Report Slow the Dollar?

US data showed on Tuesday that business activity in the manufacturing sector continued to contract in July with the number of job openings on the last business day of June dipping to 9.58 million. Although the DXY pulled back from a multi-week high touched above 102.40 after this data, it ended the day in positive territory. Late in the American session, the global rating agency Fitch announced that it was downgrading the US government’s credit rating from AAA to AA+, citing expected fiscal deterioration over the next three years and a high and growing public debt burden.

During the Asian session, the minutes of the Bank of Japan’s June monetary policy meeting showed that policymakers shared the view that no operational adjustments in yield curve control were necessary at this time. For his part, the deputy governor of the BoJ, Shinichi Uchida, reiterated the importance of patiently maintaining a flexible monetary policy. After a three-day rally in which the pair gained almost 3%, the USD/JPY it came under downward pressure again and lost 0.5% on the day, settling at around 142.60. Despite the dovish BoJ stance, the Japanese Yen appears to benefit from risk aversion.

New Zealand data showed on Wednesday that the unemployment rate rose to 3.6% in the second quarter from 3.4% in the first quarter. In the same period, the participation rate increased to 72.4% from 72% and the labor cost index rose 1.1% quarterly. He NZD/USD it extended its slide into the Asian session and was last seen trading at its lowest level in a month near 0.6100.

He EUR/USD it rallied above 1.1000 in the Asian session, but pulled back below that level at the start of the European session on Wednesday.

He GBP/USD closed Tuesday below 1.2800 for the first time in three weeks. The pair is relatively quiet early on Wednesday.

Pressured by rising US Treasury yields, the price of gold turned south and fell towards $1,940. While the 10-year US bond yield is holding steady at around $1,940, the XAU/USD he consolidates his losses close to $1,950.

He Bitcoin it rallied after falling below $28,500, but lost its bullish momentum after testing $30,000. He ethereum it touched $1,800 on Tuesday, but turned north in the second half of the day. The ETH/USD pair, however, failed to consolidate its recovery early on Wednesday and is trading in negative territory near $1,850.