On Wednesday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7829 compared to the previous day's fix of 6.7809 and 6.7238 Reuters estimate.

The USD/JPY pair is seen consolidating near its highest level since July 31, touched during the Asian session on Wednesday, and trading around the 160.25-160.30 region.

The GBP/USD pair declines to near 1.3510 during the early Asian trading hours on Wednesday. Ongoing tensions in the Middle East provide some support to a safe-haven currency such as the US Dollar (USD) against the British Pound (GBP). All eyes will be on the US August jobs report later on Friday. 

The Aussie Dollar retreats some 0.29% against the US Dollar on Tuesday as the escalation of the Middle East conflict boosted the Greenback due to its haven appeal. The AUD/USD trades at 0.7146.

The shared currency edges lower, capped by the 200-day Simple Moving Average (SMA) at 1.1633, amid rising geopolitical tensions and escalating hostilities between the US and Iran, prompting investors to buy the US Dollar. At the time of writing, the EUR/USD trades at 1.1590, down 0.25%.

The Mexican Peso erases some of its earlier gains against the US Dollar on Tuesday as the US and Iran launched successive strikes against each other, souring risk appetite and weighing on the emerging market currency. The USD/MXN trades at 16.99, virtually unchanged.

NZD/USD trades around 0.5900 on Tuesday at the time of writing, down 0.24% on the day. The New Zealand Dollar (NZD) remains under pressure against the US Dollar (USD), which holds onto modest gains despite the release of mixed United States (US) economic data.

AUD/USD trades with a modest downside bias on Tuesday as softer-than-expected United States (US) economic data fail to generate sustained selling pressure on the US Dollar (USD).

The Pound Sterling trades sideways versus the US Dollar on Tuesday after a tranche of US economic data was mixed, with business activity dipping in August, while a strong jobs market justified Fed Chair Warsh's hawkish tilt. The GBP/USD trades at 1.3540, down a modest 0.06%.

EUR/USD struggles to attract buyers on Tuesday despite below-forecast US economic data, as the US Dollar (USD) shows little weakness following the release. At the time of writing, the pair trades around 1.1601 after touching an intraday low of 1.1587, but remains down roughly 0.14% on the day.

Brown Brothers Harriman’s (BBH) Elias Haddad highlights that rising global bond yields and firmer Oil prices have pushed 30-year US Treasury yields back to pre-buyback levels, while USD/JPY has largely retraced its post-intervention slump.

USD/JPY trades around 160.05 on Tuesday at the time of writing, gaining 0.19% on the day, as the Japanese Yen (JPY) remains under pressure against the US Dollar (USD).

USD/CHF ticks higher on Tuesday as the US Dollar (USD) recoups most of the previous day’s losses. Hawkish Federal Reserve (Fed) expectations and rising US Treasury yields keep the Greenback underpinned near its recent highs.

AUD/USD declines 0.29% on Tuesday, trading around 0.7145 at the time of writing. The Australian Dollar (AUD) struggles to retain the momentum initially generated by encouraging Chinese economic data, while the US Dollar (USD) benefits from rising US Treasury yields.

USD/CAD trades on the front foot on Tuesday, supported by a firmer US Dollar (USD), while trade tensions between the United States (US) and Canada and diverging Federal Reserve (Fed) and Bank of Canada (BoC) policy expectations weigh on the Canadian Dollar (CAD).

Brown Brothers Harriman’s (BBH) Elias Haddad reports EUR/USD is trading heavy just below 1.1600 as Eurozone August Consumer Price Index (CPI) confirmed easing underlying inflation, with core and services measures slowing.

Rabobank’s Jane Foley examines Japanese Yen (JPY) weakness amid Prime Minister Sanae Takaichi’s preference for low interest rates, US Treasury pressure on BoJ policy and recent coordinated FX intervention.

The Euro (EUR) trades 0.2% lower to near 1.1593 against the US Dollar (USD) during the European trading session on Tuesday.

TD Securities highlights asymmetric upside risk in USD/CAD as US–Canada trade tensions escalate.

The New Zealand Dollar (NZD) is down 0.35%, marginally below 0.5900 against the US Dollar (USD) during the European trading session on Tuesday.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has bounced strongly from 1.1573 after an excessive selloff, but momentum remains subdued. Intraday, the Euro (EUR) is expected to hold within 1.1595–1.1640.

The US Bureau of Labor Statistics has a busy week, releasing relevant employment data. It will start on Tuesday with the publication of the July Job Openings and Labor Turnover Survey (JOLTS) at 14:00 GMT.

Commerzbank’s Michael Pfister highlights that Brazil’s very high real interest rates have not prevented solid GDP growth, as expansionary fiscal policy has offset restrictive monetary conditions. With elections approaching and spending rising again, he warns that budget consolidation may be slow.

The US Dollar (USD) is up 0.15% to near 160.00 against the Japanese Yen (JPY) during the European trading session on Tuesday.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that USD/JPY has pulled back from 160.20, with intraday price action expected to stay between 159.50 and 160.15 as upward pressure eases.

Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) data for August arrives at 3.3% Year-on-Year (YoY), as expected, higher than the previous reading of 2.9%.

Attention shifts to Tuesday’s release of the August ISM Manufacturing Purchasing Managers Index (PMI), one of the most closely followed indicators of activity in the US manufacturing sector and an important barometer of the broader economy.

The GBP/JPY cross edges higher on Tuesday, though it lacks bullish conviction and remains confined within a familiar range held over the past week or so. Spot prices currently trade around mid-216.00s amid a broadly weaker Japanese Yen (JPY).

The Euro (EUR) trades subduedly at around 185.50 against the Japanese Yen (JPY) during the European trading session on Tuesday. The major currency is mildly under pressure ahead of the Eurozone flash Harmonized Index of Consumer Prices (HICP) data for August, which will be published at 09:00 GMT.

ING’s Francesco Pesole expects the Reserve Bank of New Zealand to raise rates by 25bp to 2.75%, with markets fully pricing the move. He argues that current market pricing for further tightening looks too hawkish unless the RBNZ lifts its rate path significantly.