Major currency pairs remained stable during the European morning session on Tuesday as investors awaited upcoming economic data releases for further direction. Eurostat is set to release revised July inflation figures later in the day, while Statistics Canada will publish July’s Consumer Price Index (CPI) data. Market participants are also closely watching for comments from Federal Reserve (Fed) officials.
After facing bearish pressure earlier in the week, the U.S. Dollar (USD) continued to weaken against major counterparts on Monday as bullish momentum in Wall Street suggested an improving risk sentiment. As of the early European session, U.S. stock index futures are trading slightly higher, with the USD Index steady just below 102.00.
The EUR/USD pair gained 0.5% on Monday for the second consecutive day, reaching its highest level since late December near 1.1090. On Tuesday, the pair entered a consolidation phase, hovering around 1.1080. Investors are also looking ahead to the European Central Bank‘s (ECB) release of Negotiated Wage Rates data for the second quarter.
In Asia, the People’s Bank of China (PBoC) announced that it would leave its one-year and five-year Loan Prime Rates (LPRs) unchanged at 3.35% and 3.85%, respectively, aligning with market expectations.
Meanwhile, the Reserve Bank of Australia‘s (RBA) minutes from its August policy meeting revealed that while board members considered raising rates, they ultimately decided that maintaining a steady rate would better manage risks. The central bank indicated that the cash rate might need to remain steady for an “extended period.” Following a nearly 1% increase on Monday, AUD/USD retreated slightly and is now trading above 0.6700. NZD/USD, however, continues its bullish momentum, hitting a fresh six-week high around 0.6130.
In Canada, July’s CPI is expected to show a slight decrease to 2.5% year-over-year, down from 2.7% in June. USD/CAD is trading marginally lower near 1.3620 early Tuesday, after losing 0.3% on Monday.
GBP/USD extended its upward trend, reaching its highest level in over a month at 1.3000 during Tuesday’s Asian session, before slightly pulling back as the European session began.
USD/JPY recovered from a two-week low hit on Monday, closing the day in negative territory but inching higher towards 147.00 on Tuesday morning.
Gold, which corrected lower to $2,480 on Monday, regained its momentum in the American session, closing slightly above $2,500. On Tuesday, XAU/USD is fluctuating within a narrow range around $2,505.
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