Forex Today: Dollar Steady Awaiting ISM Services PMI

This is what you need to know to trade today tuesday september 6:

With trading conditions normalizing after the three-day weekend in the US, the Dollar Index remains relatively quiet early on Tuesday. The ISM services PMI for August will be the only relevant data on the US economic docket. Meanwhile, risk flows appear to have returned with major European equity indices trading in positive territory. Additionally, US stock index futures are up 0.8%-1.1%, while the 10-year US Treasury yield is up more than 1%.

During Asian trading hours, the Reserve Bank of Australia (RBA) announced that it had raised its interest rate by 50 basis points (bps), to 2.35% from 1.85%. In its monetary policy statement, the RBA said it expects to raise the policy rate further in the coming months, but noted that the board will not follow any pre-set guidance. Turning to the inflation outlook, the RBA said it believes medium-term inflation expectations remain well anchored. Although the AUD/USD rallied towards 0.6850 during the Asian session, lost its traction and turned negative on the day below 0.6800.

Earlier in the day, the German agency Destatis reported that factory orders contracted 13.6% annually in July, compared to the market forecast of a 6.1% decline. Turning to energy-related news, Gazprom Deputy CEO Vitaly Markelov stated on Tuesday that the Nord Stream 1 pipeline will not come online until Siemens Energy replaces the faulty equipment. Over the weekend, Siemens said it had not been asked to do the work and reiterated that the sanctions would not prohibit maintenance. Despite the dismal data from Germany and the increased concern about the worsening energy crisis in Europe, the EUR/USD rises towards parity, supported by improving market sentiment.

The USD/JPY extended its rally on rising US yields and rose to its highest level in more than two decades above 141.00 on Tuesday. Data from Japan showed that overall household spending rose 3.4% year over year in July, below market expectations of 4.2%. On Tuesday, Japanese Finance Minister Shunichi Suzuki commented on market developments: “I have the impression that recent currency movements are becoming more significant.”

Liz Truss won the Conservative Party leadership race to become Britain’s next Prime Minister on Monday, as expected: “I will put forward a bold plan to cut taxes and grow our economy,” Truss said during her speech at acceptance. After touching on Monday its weakest level since March 2020, at 1.1443, the GBP/USD staged a decisive rebound and was last seen up 0.75% on the day to 1.1600.

The Prayed started the second day of the week on a strong note and advanced to a new weekly high of $1,726. However, with US bond yields starting to rise during the European session, XAU/USD erased much of its daily gains and was last seen around $1,715.

The Bitcoin continues to fluctuate in an extremely tight range below $20,000 and the ethereum is holding on to modest daily gains above $1,600 in European Tuesday morning.