The dollar made a marginal gain against the euro, but fell versus sterling, the yen and most other currencies in choppy trading amid uncertainty regarding the growing impact of the Delta COVID variant, Chinese tech sector regulatory ructions nL1N2PA0M6, and ahead of Friday's U.S. employment report.
Pandemic lockdowns have expanded in Asia nL1N2P708B and restrictions are rising in the U.S. nL1N2PA18J ahead of the important back-to-school period that is seen pivotal for loosening up the very tight U.S. labor market and hastening Fed discussions about tapering asset purchases.
With all that, EUR/USD fell about 0.1% after an early attempt to retake Monday's and Friday's highs fell short amid de-risking flows favoring the dollar and Treasuries.
EUR/USD's late July rebound is consolidating ahead of Friday's U.S. jobs report, and to a lesser extent, Wednesday's ADP and ISM services data.
Though the technical bias is bullish, the options market isn't flagging any major moves near-term [nL1N2PA183.
USD/JPY fell around 0.2% and was the liveliest of the big three currencies, earlier breaking below July's 109.07 low and 61.8% Fibo support as stocks and Treasury yields were initially under pressure, broadly favoring the haven yen.
Prices recovered, with stocks, from a 108.875 EBS Tuesday low to beyond the 109.07 breakdown point.
But the daily and weekly charts look quite bearish and beset by tumbling Treasury-JGB yields that could see April's lows tested if upcoming U.S. data does not reverse the downtrend in Treasury yields nL1N2PA15N.
Sterling gained around 0.2%, recovering from the early risk-off dip tied to stocks that attracted S&P 500 dip-buyers and then new session highs, helping the risk-sensitive sterling retrace most of its earlier risk-off dip.
Sterling recovered from July lows after UK COVID cases fell and as the BOE is seen beating the Fed to the punch on the first rate hike nL1N2PA17N.
But sterling's recovery last week ran into 61.8% Fibo, daily cloud and 55-day moving average hurdles after a rapid 3% rebound.
The 61.8% Fibo of the June-July slide and the cloud top converge at 1.3991-92 on Friday.
Aussie and kiwi gained about 0.4% and 0.5%, respectively, after the RBA surprised by not scuttling its tapering plans and the RBNZ proposed tighter housing lending metrics nL1N2PA0P6nL4N2P93NK.
Both also benefited from the rebound to new session highs in stocks.
Bitcoin and ether are last down around 3% and 5%, getting another dose of angst from SEC Chair Gensler's calls on Congress to crack down on crypto activities nL1N2PA1IV.
Wednesday's main events are ADP and ISM services reports for July, the former a rough prelude to Friday's jobs report and the latter after Monday's manufacturing ISM was softer than forecast.
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