Forex Today: Mood sours as markets await mid-tier data releases

Here is what you need to know on Tuesday, October 8:

Markets hold a cautious tone early Tuesday as investors await the next batch of macroeconomic data releases. The US economic docket will feature NFIB Business Optimism Index for September and RealClearMarkets/TIPP Economic Optimism Index data for October. The US Bureau of Economic Analysis will also publish Goods Trade Balance figures for August. Later in the American session, several Federal Reserve (Fed) policymakers are scheduled to deliver speeches.

The National Development and Reform Commission (NDRC), China’s state planner, said on Tuesday that the downward pressure on China's economy is increasing. "China's economy is facing more complex internal, external environments," the NDRC noted. After Wall Street's main indexes closed the first day of the week deep in negative territory on Monday, US stock index futures trade marginally lower early Tuesday, reflecting the souring mood. Meanwhile, the US Dollar (USD) Index continues to move sideways near 102.50 after failing to make a directional move in either direction on Monday.

The data from Germany showed that Industrial Production increased by 2.9% on a monthly basis in August. This reading followed the 2.4% contraction recorded in July and came in better than the market expectation of 0.8%. EUR/USD struggles to benefit from the upbeat data and trades marginally higher on the day below 1.1000.

In the minutes of the September policy meeting, the Reserve Bank of Australia (RBA) said board members discussed options of lowering raising interest rates and added: "Scenarios for lowering, holding, and raising rates are all conceivable given the considerable uncertainty about the economic outlook." While speaking at the Walkley Foundation, RBA Deputy Governor Andrew Hauser noted that they will act on policy when inflation stops being high and sticky. After posting large losses on Monday, AUD/USD continued to push lower in the Asian session on Tuesday. At the time of press, the pair was trading at its lowest level since mid-September below 0.6730.

Japan economy minister Ryosei Akazawa said on Tuesday that a decline in real wages for the first time in three months is not good news. Akazawa further stated that the Japanese government will create an environment where real wages continue to rise. USD/JPY showed no reaction to these remarks and was last seen fluctuating in a narrow channel at around 148.00.

GBP/USD edged lower amid risk-aversion in the second half of the day on Monday and closed the day below 1.3100. The pair struggles to stage a rebound early Tuesday.

Gold registered modest losses for the fourth consecutive day on Monday. XAU/USD stays on the back foot and trades below $2,640 in the European morning on Tuesday.