This is what you need to know to operate the Thursday September 1:
Following Wednesday’s volatility amid month-end flows, the dollar gained strength early on Thursday with the Dollar Index breaking above the 109.00 zone. Although the dollar lost some interest after US data showed private sector employment grew at a much softer-than-expected pace in August, market risk aversion helped the currency find demand. July unemployment rate data from the euro zone will be seen as a new driver later in the session. Weekly initial jobless claims, unit labor cost data for the second quarter and the ISM manufacturing PMI survey for August will be released on the US economic docket.
Wall Street’s major indices suffered heavy losses on Wednesday with US stock index futures down 0.4%-1.2% in European morning trading on Thursday, suggesting safe-haven flows continue to dominate market action. Meanwhile, the Shanghai Composite lost 0.5% despite China’s cabinet saying that Beijing will publish detailed steps of a newly announced set of policy measures in early September.
After data from the euro zone showed that the annual Consumer Price Index rose to 9.1% from 8.9% in July, the shared currency managed to remain resilient against the dollar and the EUR/USD closed the day at its highest level since mid-August. According to Reuters, eurozone money markets are now pricing in an 80% chance that the ECB will raise interest rates next week by 75 basis points, up from just over 50% earlier in the week. Despite the ECB’s bets, EUR/USD is trading in negative territory below 1.0050 early on Thursday.
The GBP/USD extended its decline and reached its weakest level in more than two years below 1.16000 on Thursday. The British Pound is struggling to find demand amid risk aversion and renewed interest in the Euro.
The pair USD/JPY reached new all-time highs above 139.50 during the Asian session, but pulled back towards 139.00 during the European morning. The 10-year US Treasury bond yield gained almost 3% on Wednesday and climbed above 3.2% for the first time in two months, fueling the USD/JPY rally.
Pressured by rising yields in the United States, the Prayed posted heavy losses for the second day in a row on Wednesday and is now trading in negative territory below $1,710.
The Bitcoin It is struggling to make a decisive move in either direction and is still trading in a tight channel around $20,000. ethereum rose above $1,600 on Wednesday, but erased much of its daily gains in the second half of the day. ETH/USD was last seen losing more than 1% on the day at $1,530.
Source: Fx Street
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