Forex Today: Focus shifts to US PCE, ADP, inflation in OZ and Chinese PMIs

The US Dollar (USD) has seen a significant recovery, reaching multi-week highs amid persistent geopolitical concerns. The US Dollar Index (DXY) has neared the 101.60 level for the first time since late July, as investors monitor the Middle East conflict and US Treasury yields. Key economic data for the US includes the MBA Mortgage Applications, ADP Employment Change, Personal Consumption Expenditures (PCE), Personal Income/Spending, the Chicago Purchasing Managers' Index (PMI), the final Q2 GDP Growth Rate, and the Energy Information Administration's (EIA) weekly report on crude oil stockpiles. Fed officials, Goolsbee and Barkin, are set to speak.

The Euro (EUR) has hit three-month lows, nearing the crucial 1.1300 support level, due to a stronger US Dollar and ongoing US-Iran conflict jitters. Germany's Retail Sales, labor market report, and preliminary Inflation Rate are expected tomorrow, along with the European Central Bank's (ECB) President Schnabel speaking.

The British Pound (GBP) has challenged the 1.3200 region, reaching fresh three-month lows. On the UK's agenda are Q2 Current Account results, Nationwide Housing Prices, quarterly Business Investment figures, and the final Q2 GDP Growth Rate. The US Dollar has also shown a modest upside bias, aiding USD/JPY's gains near 157.50 since Monday. The flash Industrial Production reports are due on September 30, alongside Retail Sales, Housing Starts, and Construction Orders.

The Australian Dollar (AUD) has faced renewed downside pressure, dipping below the critical 0.7000 level on Tuesday, reversing two consecutive daily gains. The important Inflation Rate will be released on September 30, along with flash Building Permits, Private House Approvals, and Private Sector/Housing Credit figures. Crude oil futures have lost further ground, testing the $90.00 mark per barrel amid heightened geopolitical tensions in the US-Iran-Hormuz conflict.

Gold has partially recovered from its initial week's decline but has not yet reached the $4,200 mark per troy ounce. The US Dollar's strength and rising US Treasury yields have continued to pressure gold.

In Australia, the Reserve Bank of Australia (RBA) announced a cash rate hike to 4.60%, as expected, with the possibility of further hikes if needed. Meanwhile, USD/JPY has struggled to capitalize on an overnight bounce, consolidating around 157.50 in the Asian session. Rumors of a potential US-Japan joint intervention to support the Japanese Yen have emerged, supported by hawkish Bank of Japan (BoJ) sentiments.

Rising Federal Reserve rate-hike expectations and oil-driven inflation concerns have fueled the upward trend in US bond yields, keeping the US Dollar near a two-month high and bolstering the pair. Gold has lost some of its initial gains, testing the $4,150 zone per troy ounce, despite higher US Dollar and Treasury yields, while geopolitical tensions limit its downside potential.

Cryptocurrencies maintain a neutral-to-bullish outlook, with Bitcoin approaching $84,000, Ethereum holding above $2,700, and Ripple surpassing the $1.50 level.