Forex Today: US Dollar firms ahead of global flash PMIs

The US Dollar Index (DXY) remains close to 98.90, not yet surpassing the 100 mark, but gradually increasing on Thursday. Federal Reserve Bank of St. Louis President Alberto Musalem's hawkish remarks played a significant role, citing rising inflation, a lower likelihood of keeping rates steady, and advocating for potential rate hikes to prevent the Federal Reserve from taking more aggressive measures later.

As data-intensive Friday approaches, featuring flash Purchasing Managers Index (PMI) surveys in Europe, the United Kingdom, and the United States, the Greenback exhibits a slight upward bias. The table below presents the percentage change of US Dollar (USD) against major currencies on today's trading day. The US Dollar demonstrated the strongest performance against the Japanese Yen.

The heat map illustrates percentage changes of major currencies against each other. For instance, selecting the US Dollar from the left column and moving horizontally to the Japanese Yen in the table reveals the percentage change of USD/JPY. The Euro and the Pound maintained their positions, while a notable surge in oil prices bolstered the commodity currency bloc, keeping the Canadian Dollar's strength intact and preventing the Dollar from expanding its dominance beyond the Japanese Yen.

EUR/USD maintained its position near the mid-1.1600s, ending essentially unchanged as traders hesitated ahead of Eurozone flash PMIs. GBP/USD edged higher, staying above the 1.3600 mark despite the Dollar's strengthening, with the UK's heavy data load for Friday being a major focus. USD/JPY climbed higher, surpassing the 159.00 barrier due to hawkish Fed commentary weighing on the Yen.

AUD/USD lost momentum, retracing toward the 0.7100 area after weak domestic jobs data and ahead of Australia's flash PMIs. Gold remained stable around $4,520 per troy ounce, retaining its recent gains. West Texas Intermediate (WTI) Oil continued its upward trajectory, nearing $87.00 per barrel as Middle East tensions persisted. The Asian session commences with Australia's preliminary S&P Global PMIs.

Following a weak employment report and elevated inflation expectations, a weak set of surveys could intensify pressure on the Australian Dollar. European markets lead the proceedings. UK Retail Sales for July are released first, expected to decline from the previous month. Subsequently, flash PMI surveys from France, Germany, and the Eurozone's HCOB are unveiled, followed by the UK's own S&P Global PMIs.

In the United States, Canadian Retail Sales precede US S&P Global flash PMIs, which are among the lighter data on a generally quiet US calendar. Looking beyond Friday, the upcoming Jackson Hole Symposium takes center stage, with new Federal Reserve Chair Kevin Warsh delivering his first keynote address, potentially offering insights into the September policy decision. Agustin Wazne, a Junior News Editor at FXStreet, specializes in Commodities and covers Majors.