Ella 
What you need to know for Tuesday, August 22nd:
Macroeconomic data was light on Monday, but major currency pairs remained volatile, and the dollar fell slightly on Monday.
Market sentiment remained subdued, while government bond yields rose, signaling the government’s cautious stance. U.S. Treasury yields hit their highest level since 2007 as investors worried that central bankers around the world will extend monetary tightening programs to curb inflation.
China’s economy is still in the eye of the storm following news that the Chinese government’s revenue from land sales fell for the 19th consecutive month in July. The People’s Bank of China (PBoC) cut its benchmark one-year lending rate by 10 basis points to 3.45% on Monday, in line with expectations, following a similar step last week and in line with market expectations that China would take bolder steps Very different. The yuan fell after the news, as speculative interest awaits more aggressive steps by China to support the currency. Later in the day, UBS cut its 2023 real GDP growth forecast for China to 4.8% from 5.2%.
Inflation is likely to remain above the central bank’s target for an extended period, while economic growth in the third quarter is expected to be roughly flat, according to a monthly report from the German Bundesbank.
EUR/USD struggles around 1.0900, lacking momentum to break above this level. GBP/USD looks more likely to extend its gains and is currently trading around 1.2740. AUD/USD rose and so did gold, even as it held below $1,900. USD/CAD trades higher as lower oil prices weigh on the loonie.
USD/JPY is trading above 146.00 and is close to the recent multi-month high of 146.53 amid growing speculation that the Bank of Japan will soon need to reset its ultra-loose monetary policy.
This week’s macroeconomic calendar is lackluster, with the focus on the Jackson Hole symposium starting next Thursday. Market participants will look to speeches by Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde on Friday for clues about the central bank’s future decision-making.
