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Stellar ISM Helps USD Bounce

FOREX

August economic data continues to be favourable for the US, with ISM manufacturing hitting a multi-year high and well above expectations (56.0 vs. Exp. 54.8). The data helped support an underperforming greenback, which flipped from being the worst performing currency in G10 across European hours, to trading slightly better into the NY close.

USD came up short against GBP, however, which extending gains above $1.34 to hit the best levels since December 2019, with consistent demand for upside GBP/USD options helping support the rally.

CHF was the poorest performer, falling against all others in G10, with the weakness driven by EUR/CHF taking out key tech resistance layered around the mid-August highs at 1.0849. 2020 highs in EUR/CHF at 1.0916 are now the initial upside target.

South Korean inflation data, Australian GDP, US ADP Employment Change and Factory Orders are the calendar highlights Wednesday. Central bank speak picks up also, with representatives from the BoE, Fed and ECB all due.

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