The US dollar witnessed a strong rise during trading on Tuesday, continuing its gains for the second consecutive day, despite closing yesterday with monthly losses of about 1.4%, amidst the support the greenback received ahead of the release of some important economic data today.

The dollar now

In trading terms, the dollar index – which measures the performance of the digital currency against a basket of 6 major currencies – rose by about 0.52% to record its highest levels in over 3 weeks; since July 10, reaching 102.391 points.

What influenced dollar movements today?

The currency markets are currently awaiting the preliminary data of the US labor market with the release of job vacancy data and the turnover rate later today, coinciding with the release of the Purchasing Managers' Index for the manufacturing sector in the United States, issued by the Institute for Supply Management.

With the increasing degree of uncertainty in the markets today, investors' appetite for risk clearly declined, and there was a greater demand for the dollar as a safe haven, achieving gains against both the Japanese yen and the Swiss franc in currency markets, as well as gold and bond yields.

This came after the yellow metal was subjected to strong selling following the issuance of a report from the World Gold Council, which showed a 2% decline in global demand for gold during the first half of the year, with expectations of further declines, especially in India, which is one of the major consumers, as well as China amid weak growth momentum in the largest consumer.

In the currency markets, the dollar benefited from the continued weakness of the Japanese yen, especially after the remarks of the Japanese Minister of Economy today that the latest decisions by the Bank of Japan do not indicate a shift in its accommodative monetary policy, clarifying that it supports the sustainability and flexibility of monetary easing.

In addition to this, the US dollar also achieved strong gains against the Australian dollar, which was subjected to sharp selling after the Reserve Bank of Australia decided to keep interest rates unchanged, contrary to market expectations that it would raise them by 25 basis points.

The dollar in currency pairs

In trading terms, the euro declined against the US dollar by 0.33% to 1.0960 dollars, while the British pound fell against the US dollar by about 0.55% to reach 1.2764 dollars.

As for its trading against safe haven currencies, the dollar rose against the Japanese yen by 0.62% to reach 143.13 yen, while the dollar declined against the Swiss franc by 0.61% to 0.8770 francs.

At the same time, the Australian dollar rose against its US counterpart by about 1.64% to 0.6608 US dollars, and the New Zealand dollar also rose by about 1.12% against the US dollar to 0.6138 US dollars, and the Canadian dollar also rose against its US counterpart by about 0.80%, recording 1.3295 US dollars.