Forex Today: Markets Turn Cautious, Focus on US Retail Sales and FOMC Minutes

This is what you need to know to trade today Wednesday, August 17:

Following Tuesday’s choppy action, the Dollar Index regained its traction early on Wednesday and climbed above 106.60 with investors turning cautious. The data of the Gross Domestic Product of the eurozone for the second quarter will be the protagonists of the European economic agenda. Later, July US retail sales data may give a further boost before the FOMC releases its July meeting minutes at 1800 GMT. US stock index futures are down between 0.2% and 0.4% in the early hours of the European session.

July Fed Minutes Preview: Can they influence September rate hike expectations?

During Asian trading, the Reserve Bank of New Zealand announced that it had raised its interest rate by 50 basis points to 3%, as expected. RBNZ Governor Adrian Orr stated that while a recession is not anticipated, lower-than-expected growth is expected. With the initial reaction, the NZD/USD rallied towards 0.6400 but ended up reversing direction with the dollar gaining strength during European trading hours. At the time of writing, the pair is down 0.4% on the day, trading at 0.6318.

The UK Office for National Statistics reported on Wednesday that the UK inflation, measured by the CPI, rose to 10.1% in July from 9.4% in June. In the same period, the core CPI rose to 6.2% from 5.8%, beating market expectations of 5.9%. With the immediate reaction, the GBP/USD rallied above 1.2140 before erasing losses and returning below 1.2100.

With the dollar holding firm midweek, the EUR/USD it continues to fluctuate in a relatively tight range below 1.0200.

The USD/JPY took advantage of Tuesday’s gains and rallied towards 135.00 on Wednesday. The 10-year US Treasury bond yield is up more than 2% on the day, fueling the pair’s advance.

After rallying above $1,780 during Asian trading, the Prayed it turned south and was last seen trading in negative territory, slightly above $1,770.

The Bitcoin is struggling to make a convincing bounce amid risk aversion and is trading in negative territory below $24,000, having posted losses for the previous three days. After a recovery attempt, Ethereum he lost his momentum and wiped out much of his daily earnings. At the time of writing, ETH/USD was holding on to small daily gains at $1,890.