BoC policy announcements, mid-level US data to draw market attention

Here’s what you need to know on Wednesday, September 4:

Major currency pairs continue to trade in familiar ranges on Wednesday morning as markets await the next catalyst. Eurostat will publish producer price index (PPI) data for July in the European session. In the second half of the day, data on the July merchandise trade balance, factory orders and JOLTS job offers will be presented in the US economic register. During US trading hours, the Bank of Canada (BoC) will announce monetary policy decisions and the Federal Reserve will release its Beige Book later in the session.

Data from Australia showed in the Asian session that the country’s Gross Domestic Product expanded at an annual rate of 1% in the second quarter, in line with market expectations. Meanwhile, China’s Caixin Services PMI fell slightly to 51.6 in August from 52.1 in July. After Tuesday’s sharp decline, AUD/USD it is holding steady around 0.6700 early Wednesday.

The BoC is expected to cut the policy rate by 25 basis points (bps) to 4.25% after the policy meeting in September. USD/CAD rose 0.4% on Tuesday and ended its fifth consecutive day of trading in positive territory. The pair remains in a consolidation phase slightly below 1.3550 in the European morning.

The US dollar (USD) The index hit its highest level since Aug. 20 at 101.91 on Tuesday, but erased some of its gains to close the day slightly higher. The index is holding above 101.50 Wednesday morning, and the benchmark 10-year U.S. Treasury yield remains near 3.8 percent after falling more than 2 percent on Tuesday. Meanwhile, US stock index futures were last seen losing between 0.4% and 0.8%.

EUR/USD it fell on Tuesday but managed to recover above 1.1050 on Wednesday. Monthly PPI in the euro area is forecast to increase by 0.3% in August.

GBP/USD saw small losses on Tuesday. The pair is holding steady slightly above 1.3100 in the European session.

USD/JPY turned south and snapped a four-day winning streak on Tuesday. The pair remains under bearish pressure early Wednesday and is trading around 145.00.

After failing to stabilize above $2,500, Gold closed in negative territory on Tuesday. XAU/USD continues to decline on Wednesday morning and was last seen trading below $2,490.