Forex Today: Trade is expected to remain centre stage. The RBI is seen on hold.

The US Dollar (USD) extended its auspicious start to the week into Tuesday, posting decent gains amid ongoing debates over the White House’s trade policy, speculation about additional Federal Reserve rate cuts, and uncertainty over who will succeed Chair Jerome Powell. Meanwhile, all eyes turn to the Reserve Bank of India (RBI), which is widely expected to hold its benchmark rate steady at 5.50% on Wednesday.

Here's what to watch on Wednesday, August 6:

The US Dollar Index (DXY) picked up extra upside impulse, rising to two-day highs just above the key 99.00 barrier, helped by an acceptable bounce in US yields across the curve. The usual weekly MBA Mortgage Applications are due, seconded by the EIA’s weekly report on US crude oil inventories. In addition, the Fed’s Collins, Cook, and Daly are due to speak.

EUR/USD traded on the defensive for the second straight day on Tuesday, this time slipping back to the 1.1530-1.1520 band. Germany’s Factory Orders will be published, seconded by the HCOB Construction PMI in Germany and the euro area, as well as Retail Sales in the bloc.

GBP/USD advanced marginally on Tuesday, revisiting the 1.3300 region as investors gradually shift their attention to the upcoming BoE meeting. The S&P Global Construction PMI will be the only release of note across the Channel.

USD/JPY gathered steam and managed to partially reverse two daily drops in a row, approaching the key 148.00 hurdle on Tuesday. The key Average Cash Earnings is next on tap in “The Land of the Rising Sun”.

AUD/USD traded in an inconclusive fashion south of the 0.6500 hurdle, adding to Monday’s vacillating tone. The Ai Group Industry Index comes next on the Australian calendar.

WTI prices dropped for the fourth consecutive day on Tuesday, receding to multi-day lows and challenging the $65.00 mark per barrel as investors continued to assess the latest decision by OPEC+ to hike its oil output.

Gold prices seem to have met some resistance around the $3,380 region per troy ounce, coming under mild downside pressure after three days in a row of gains. Silver prices extended their recovery, up for the third consecutive day and retesting the $37.50 area per ounce.