FOREX TODAY: DOLLAR INCREASES AS STOCKS AND METALS DECLINE

During the Asian session, markets will be cautious as they await news on Chinese inflation. The Reserve Bank of New Zealand's third-quarter inflation projections as well as New Zealand's Electronic Card Retail Sales figures will be made public. Machine Tool Orders for July are among the impending data for Japan.

WHAT YOU SHOULD BE AWARE OF ON WEDNESDAY, AUGUST 9 IS AS FOLLOWS:

Weaker-than-expected Market trepidation is a result of recent Chinese trade statistics. The downgrading of US banks by Moody's has also dampened risk aversion. The unexpected windfall tax on bank profits that Italy announced only served to worsen the mood. Fitch lowered the credit ratings of small and midsize US lenders and issued a warning about possible reductions to larger institutions.

Following the announcement of the quarterly refunding, the first round of Treasury auctions went well, with good supply in the 52-week bill and 3-year note auctions. The US will sell 10-year notes on Wednesday. The 10-year tested levels below 4.0%, and the 2-year was at 4.75% as US Treasury yields declined. The July CPI report, which will be announced on Thursday, is the topic of discussion.

On Tuesday, Federal Reserve official Harker reaffirmed his conviction that the institution may have reached a stage where it can be patient and hold interest rates constant. The speaker said, “We'll start cutting interest rates probably sometime next year.”

China will release its July inflation report on Wednesday in the wake of the unexpectedly poor trade figures. It is anticipated that both the Producer Price Index and the Consumer Price Index will decrease from a year ago by 0.4% and 4.1%, respectively.

The Euro suffered as a result of Italy's bank tax announcement. The EUR/USD fell to a low of 1.0927 before rebounding to 1.0960, although the overall trend is still unfavorable.

During the American session, GBP/USD recovered some of its losses, moving up from below 1.2700 to 1.2750. On Friday, significant UK GDP numbers are due.

Despite declining government bond yields and sensitivity to risk, the USD/JPY increased, signaling a stronger US Dollar. The pair increased for the second day in a row, returning to the level of 143.00. Machine Tool Orders for July will be reported from Japan.

USD/CAD increased, rising above 1.3500, but then fell down, closing in on 1.3400. Building Permits for June will be reported by Canada.

The Aussie and the Kiwi were affected by worries about Chinese development. The NZD/USD pair hit its lowest point in two months at 0.6033 before recovering to 0.6060. Electronic Car Sales for July are due in New Zealand earlier on Wednesday. The Reserve Bank of New Zealand will publish its report on inflation expectations later in the day.

Following a two-month low below 0.6500, the AUD/USD pair increased to 0.6550 as the US Dollar dropped.

The Mexican Peso is still strong, but USD/MXN surged to 19.28 before falling back near 17.05, wiping all gains. Wednesday will bring inflation data from Mexico.

The session for crude oil prices was erratic. WTI fell below $80.00 during the Asian and European sessions due to risk aversion, but it recovered and climbed back to the $83.00 region after Saudi Arabia said it would continue stepping up precautionary measures to support the stability of the oil market.

At $1,924, gold closed at its lowest price in a month as market pressure persists despite declining US yields. Silver dropped below $23.00 and is still falling.