US dollar struggles to find support as focus shifts to PMI data

Here’s what you need to know on Thursday, August 22:

Following an attempted recovery seen in the first half on Wednesday, The US dollar The index turned south in the US session and ended its fourth straight day in negative territory. During European trading hours on Thursday, preliminary HCOB manufacturing and services PMI data for August in Germany and the euro area, along with S&P Global/CIPS PMI figures, will be analyzed by market participants. Later in the day, weekly data on initial jobless claims, existing home sales and S&P Global PMI data will be presented in the US economic register.

The US Bureau of Labor Statistics announced on Wednesday that the preliminary estimate of the benchmark revision points to an adjustment to total non-farm payrolls in March 2024 of -818,000 (-0.5%). Later in the day, minutes from the Federal Reserve’s (Fed) policy meeting on July 30-31 showed that the vast majority of policymakers believed that if incoming data continued to meet expectations, it was likely opportune to ease the policy at the next meeting. The USD index was last seen moving in a tight channel slightly above 101.20, already down more than 1% since the start of the week. Meanwhile, U.S. stock index futures are trading marginally lower on the day, and the benchmark 10-year U.S. Treasury yield remains near the lower end of its weekly range at about 3.8 percent.

During Asian trading hours, data from Australia showed the Judo Bank Composite PMI improved to 51.4 in the August flash estimate from 49.9 in July. This reading failed to trigger a noticeable reaction in the AUD/USDwhich continues to move sideways around 0.6750.

EUR/USD it climbed above 1.1170 on Wednesday and hit its highest level since July 2023 before entering a consolidation phase early Thursday. At press time, the pair was basically unchanged on the day at 1.1150.

GBP/USD it maintained its bullish momentum on Wednesday and advanced beyond 1.3100 for the first time in over a year. The pair remains slightly below this level in the European morning on Thursday.

USD/JPY it failed to benefit from selling pressure around the USD and ended the day flat on Thursday. The pair extends its sideways bar around 145.50 to start the European session.

Gold it corrected from the record level set at $2,531 on Tuesday, but managed to stabilize above $2,500 late Wednesday. XAU/USD remains relatively quiet and is trading around $2,510 early Thursday.