Forex Today: Markets remain calm ahead of Wednesday's US inflation data

Here is what you need to know on Tuesday, August 9:

The market action remains relatively subdued on Tuesday as investors refrain from making large bets ahead of Wednesday's Consumer Price Index (CPI) data. The US Dollar Index (DXY) fluctuates in a narrow range above 106.00, US stock index futures stay flat in the European morning and the benchmark 10-year US Treasury bond yield moves sideways slightly below 2.8%. There won't be any high-impact data releases from the euro area and the US economic docket will feature the NFIB Business Optimism Index, Unit Labor Costs for the second quarter and the IBD/TIPP Economic Optimism Index data later in the day.

US CPI Preview: It is the hard core that counts, five scenarios for critical inflation data.

Meanwhile, the Chinese military said that it will continue its drills around Taiwan on Tuesday. This development, however, doesn't seem to be having an impact on risk mood.

Following Monday's modest rebound, EUR/USD moves up and down in a tight range near 1.0200 early Tuesday. Citing a study by the Institute for Employment Research (IAB), Reuters reported that the German economy was expected to lose more than $260 billion in added value by 2030 because of high energy prices and the ongoing war in Ukraine.

GBP/USD climbed above 1.2100 on Monday but erased a large portion of its daily gains. As of writing, the pair was trading near 1.2080. Bank of England (BOE) Deputy Governor Dave Ramsden said on Tuesday that he would not rule out the scenario that the recession forecast by the BOE could force it to reverse course on rates next year.

USD/JPY failed to make a decisive move in either direction at the beginning of the week and closed the day flat near 135.00. The pair continues to trade near that level in the early European morning.

Gold took advantage of falling US T-bond yields and climbed to the $1,790 area before losing its traction on Tuesday. XAU/USD was last seen trading with modest losses near mid-$1,780s.

Bitcoin gained nearly 3% on Monday and seems to have gone into a consolidation phase near $24,000 on Tuesday. Ethereum climbed above $1,800 on Monday and touched its highest level since early June. ETH/USD was last seen trading flat on the day at $1,775.