Forex Today: Market stance remains cautious ahead of key US data

Here is what you need to know on Tuesday, August 15:

Investors remain on edge on Tuesday as they assess the latest headlines and data releases from China. ZEW Sentiment survey for Germany and the Eurozone will be featured in the European economic docket. In the second half of the day, July Retail Sales data from the US and July Consumer Price Index data from Canada will be watched closely by market participants. NY Fed Empire State Manufacturing Survey and June Business Inventories will be the other US data releases of the day.

During the Asian trading hours, the data from China revealed that Retail Sales rose 2.5% on a yearly basis in July, down from 3.1% in June and much weaker than the market expectation of 4.8%. Other data showed that Industrial Production expanded by 3.7% in the same period, compared to analysts' estimate for a growth of 4.5%. In a surprising development, China's central bank, the People’s Bank of China (PBOC), unexpectedly lowered the one-year Medium-term Lending Facility (MLF) rate to 2.50% from 2.65%. Several experts think that this decision opens the door to a potential cut in China's lending benchmark loan prime rate (LPR) next week.

After falling more than 1% earlier in the session, Hong Kong's Hang Seng Index erased a portion of its daily losses and was last seen losing 0.7% on the day. Meanwhile, US stock index futures trade modestly higher on the day and the US Dollar Index consolidates Monday's gains near 103.00.

Following a bearish start to the day on disappointing Chinese data, AUD/USD and NZD/USD managed to rebound after PBoC announcements. AUD/USD was last seen posting small daily gains near 0.6500 and NZD/USD was holding steady at around 0.5980.

Earlier in the day, the UK's Office for National Statistics (ONS) reported that the ILO Unemployment Rate edged higher to 4.2% in three months through June from 4%. Employment Change arrived at -66,000 and missed the market expectation of +75,000 by a wide margin. Other details of the jobs report revealed that wage inflation, as measured by the change in Average Earnings Including Bonus, climbed from 7.2% to 8.2% in the same period. GBP/USD's reaction to these figures were relatively muted and the pair was last seen moving in positive territory slightly above 1.2700.