The impending arrival of a series of US economic data releases appeared to be key in shaping the performance of the foreign exchange markets on Wednesday.
The US dollar appeared to remain firm at least in some pairs as traders nervously awaited a series of figures indicating the performance of both the country’s labour market and its manufacturing sector.
The manufacturing figures will be released by the Institute for Supply Management.
The purchasing managers’ index from this organisation is predicted to reveal that manufacturing activity over the course of June bounced back from the worst point in over a decade, a nadir it reached in April as the pandemic began to hit.
These figures are due to be released further into the day on Wednesday.
They will arrive against a backdrop of serious concerns over the US’s fight against the coronavirus pandemic.
Certain regions of the country have been beset by a clear second wave of coronavirus infections – even though large parts of the rest of the world have moved to either a cautious lifting of restrictions or targeted local lockdowns.
The US dollar, however, appeared to keep its head above water even amid all the uncertainty.
It was seen at 107.83 yen in its pair with the Japanese currency as midweek trading kicked off in Asia this morning.
This reflected close to its best performance for almost a month.
According to analysts, the dollar is likely to remain in this position against the Japanese currency provided that the economic data is not too bad.
Elsewhere across the globe, the British pound managed to see some boosts.
The single European currency plummeted by almost an entire percentage point on Tuesday in its pair against sterling, and by Wednesday morning it was spotted at 90.75 pence.
This came despite the fact that the pound’s potential for gains appeared to be capped by the suggestion that the Brexit trade talks between the UK and the EU could continue to be stymied.
Yet in an increasingly mixed-up picture for the forex markets, the euro also managed to hold firm up against the dollar – perhaps somewhat unexpectedly.
In this pair, it was seen at $1.1238.
The Japanese yen, which is noted for being one of the world’s safe-haven currencies, failed to see a day of widespread success.
This was fuelled by news from the country’s central bank, the Bank of Japan, which revealed that business sentiment had got down to its worst position in 11 years.
Geopolitical tensions were front and centre in China, meanwhile.
Traders appeared to be concerned about the impact of the fresh security law in place in Hong Kong – a move that was directed by the Chinese government and that came into force today (Wednesday).
The consequence for the onshore version of the yuan, however, were unclear.
The onshore currency, which is not traded on the free international market as other currencies are, barely changed against the greenback and was spotted at 7.0614 in this pair.