Forex Today: Growth-related concerns underpin the greenback

Valeria Bednarik FXStreet

What you need to take care of on Tuesday, August 16:

Recession-related concerns took over financial markets at the beginning of the week, pushing the safe-haven dollar higher across the FX board. The greenback pared gains during US trading hours as Wall Street managed to post modest advances but held near its intraday highs.

News coming from China spurred the dismal mood. Retail Sales in the country were up 2.7% YoY in July, while Industrial Production rose by 3.8% in the same period, both missing the market’s expectations. At the same time, the central bank unexpectedly cut a key policy interest rate and drained liquidity. Additionally, China has announced more drills around Taiwan after a new delegation of US lawmakers met with Taiwanese President Tsai Ing-wen.

Meanwhile, the EU is working on a nuclear deal with Iran, with the latter expected to provide an answer by the end of the day. The EU wants to bring back Tehran’s nuclear deal amid energy shortages triggered by the Ukraine war. News on the matter will likely come early in the Asian session.

RBA Meeting Minutes coming up next.

The EUR/USD pair trades at around 1.0160, while GBP/USD hovers around 1.2050. Commodity-linked currencies are down, with AUD/USD trading at 0.7020 and USD/CAD at around 1.2910.

Gold was among the weakest USD safe-haven rivals, down to $1,779 a troy ounce. The USD/CHF pair is at 0.6460, while USD/JPY trades at around 133.20.

Crude oil prices were sharply down, recovering modestly ahead of the close. The barrel of WTI is currently at around $88.90.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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