Forex Today: Markets await US PMI data as trading conditions normalize

Here’s what you need to know on Tuesday, September 3:

Financial markets remain quiet on the second trading day of the week. Later in the day, the US ISM Manufacturing PMI data for August will be closely watched by investors. With the long weekend in the US and Canada coming to an end on Tuesday, trading conditions are expected to normalise during US trading hours.

He US Dollar Index (USD) The index posted marginal losses on Monday as volumes remained low. As of early Tuesday, the index is holding steady above 101.50 and the 10-year US Treasury bond yield is fluctuating around 3.9%. Meanwhile, US stock index futures are trading in negative territory. The ISM manufacturing PMI is forecast to rise to 47.5 in August from 46.8 in July.

US Dollar PRICE Last 7 days

The table below shows the percentage change of the US Dollar (USD) against major currencies over the past 7 days. The US Dollar was the strongest currency against the Japanese Yen.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.86% 0.39% 1.13% 0.15% 0.31% 0.06% 0.61%
EUR -0.86% -0.46% 0.26% -0.72% -0.54% -0.83% -0.24%
GBP -0.39% 0.46% 0.75% -0.24% -0.09% -0.34% 0.22%
JPY -1.13% -0.26% -0.75% -0.96% -0.80% -1.07% -0.50%
CAD -0.15% 0.72% 0.24% 0.96% 0.16% -0.09% 0.48%
AUD -0.31% 0.54% 0.09% 0.80% -0.16% -0.28% 0.31%
NZD -0.06% 0.83% 0.34% 1.07% 0.09% 0.28% 0.57%
CHF -0.61% 0.24% -0.22% 0.50% -0.48% -0.31% -0.57%

The heatmap shows percentage changes of major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the chart will represent the USD (base)/JPY (quote).

In the early European session, data from Switzerland showed that the annual Consumer Price Index rose 1.1% on an annual basis in August. This reading followed a 1.3% increase in July and was below the market expectation of 1.2%. Other data from Switzerland showed that Gross Domestic Product (GDP) expanded at an annual rate of 1.8% in the second quarter, up from 0.6% in the first quarter. USD/CHF largely ignored these figures and was last seen moving sideways above 0.8500.

After closing the first day of the week in positive territory, the EUR/USD struggles to preserve its recovery momentum and declines towards 1.1050 in early European trading on Tuesday.

He GBP/USD failed to make a decisive move in either direction and ended the day virtually unchanged on Monday. The pair remains on the defensive in the European morning and falls towards 1.3100.

He Gold It touched its lowest level in a week at $2,490 on Monday but managed to erase a portion of its daily losses. XAU/USD is holding steady on Tuesday but remains below $2,500.

He USD/JPY closed the fourth consecutive trading day in positive territory on Monday and hit its highest level in almost two weeks above 147.00. The pair remains under bearish pressure early on Tuesday and falls towards 146.00.

US Dollar FAQs


The United States Dollar (USD) is the official currency of the United States of America, and the de facto currency of a significant number of other countries where it is in circulation alongside local banknotes. As of 2022, it is the most traded currency in the world, accounting for over 88% of all global foreign exchange transactions, equivalent to an average of $6.6 trillion in daily transactions. Following World War II, the USD took over from the British Pound as the world’s reserve currency.


The single most important factor influencing the value of the US dollar is monetary policy, which is determined by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and to promote full employment. Its main tool for achieving these two goals is to adjust interest rates. When prices rise too quickly and inflation exceeds the Fed’s 2% target, the Fed raises rates, which helps the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.


In extreme situations, the Federal Reserve can also print more dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a jammed financial system. It is an unconventional policy measure used when credit has dried up because banks are not lending to each other (for fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis of 2008. It involves the Fed printing more dollars and using them to buy US government bonds, primarily from financial institutions. QE typically leads to a weakening of the US dollar.


Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal of maturing securities in new purchases. It is generally positive for the US dollar.

Source: Fx Street

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