Forex Today: Risk-on mood is back; dollar resumes the downside ahead of PMIs

Here is what you need to know on Friday, August 21:

The preference for riskier assets is extending into the last session of the week on the back of the resumption of the selling bias around the greenback and some positive headlines on the US-China protracted conflict.

In fact, disappointing results from the US labour market on Thursday saw weekly Claims rising once again above the 1-million mark, while there are still nearly 15 million Americans receiving unemployment insurance benefits. Still in the US docket, the regional manufacturing gauge tracked by the Philly Fed index came in below estimates for the current month, all forcing the buck to fade further the bullish attempt post-FOMC minutes.

It will be quite an interesting session data wise on Friday, as it is (preliminary) PMIs-day on both sides of the Atlantic. In addition, we will see some US housing data releases, the flash print for the Consumer Confidence in the euro area and results from the UK’s high street.

The greenback, tracked by the DXY, is grinding lower and approaches the 92.50 region against the backdrop of a better note in the riskier assets. Further downside targets the YTD lows in the 92.15/10 band (August 18/19).

EUR/USD has returned to the upper-1.18s and is adding to Thursday’s gains after the 1.18 neighbourhood held well the bearish attempt earlier in the week. The release of flash PMIs should shed further details on how the economic recovery is faring in the Old Continent.

USD/JPY continues to trim Wednesday’s gains and is down for the second session in a row tracking the loss of momentum in US yields in the past couple of sessions/ On the latter, the knee-jerk extends further following tops beyond the 0.72% (August 13).

AUD/USD regains some composure and is extending the bounce off weekly lows near 0.7130 pari passu with the improved mood in the risk complex. It is worth mentioning that the Aussie dollar practically ignored the dovish tone from the RBA minutes published on Tuesday.

USD/CNY navigates the area of 7-month lows following auspicious headlines on the US-China trade front. The PBoC kept its benchmark rates unchanged on Thursday.

The barrel of West Texas Intermediate (WTI) keeps the broad consolidation theme unchanged for yet another session, although is still unable to crack the $44.00 mark amidst the ongoing 3-week positive streak.

The ounce troy of gold struggles for direction in the $1,950 region following Wednesday’s sharp pullback to the $1,920 area, where some decent contention appears to have emerged.

In the crypto-space, Bitcoin is looking to regain the key $12,000 barrier.


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