Forex Today: Markets turn cautious, focus remains on central bank speak

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

Following Monday's choppy action, markets turned cautious on Tuesday. Supported by safe-haven flows, the US Dollar gathered strength against its rivals to begin the European session. Investors will continue to keep a close eye on comments from central bankers. Later in the day, the US economic docket will feature Goods Trade Balance data for June and IBD/TIPP Economic Optimism Index for August.

In the Asian session, the data from China revealed that the trade surplus expanded to $80.6 billion in July from $70.6 billion in June. On a concerning note, however, Exports and Imports declined by 14.5% and 12.4% on a yearly basis, respectively. Meanwhile, Moody's announced late Monday that it cut credit ratings of 10 small to mid-sized US banks. Reflecting the souring market mood, US stock index futures trade in negative territory early Tuesday.

GBP/USD came within a touching distance of 1.2700 in the European session on Monday but managed to end the day in positive territory as the USD lost its strength during the American trading hours. After encountering resistance at 1.2800, however, the pair retreated to the 1.2750 area on Tuesday.

AUD/USD came under heavy bearish pressure following the disappointing Chinese data in the Asian session on Tuesday. The pair continues to push lower and trades within a touching distance of the two-month low it set at 0.6513 last week. Similarly, NZD/USD is down 0.8% so far on the day and trades at its lowest level since late June at around 0.6050.

USD/JPY registered modest gains on Monday and preserved its bullish momentum on Tuesday, The pair was last seen trading a few pips above 143.00. The data from Japan showed earlier in the day that the Eco Watchers Survey - Outlook improved to 54.1 in July from 52.8 in June.

Gold price stays on the back foot and fluctuate near $1,930 after posting small daily losses on Monday. The benchmark 10-year US Treasury bond yield is down nearly 2% on the day at around 4%, helping XAU/USD limit its losses for the time being.

Bitcoin continues to fluctuate near $29,000 and Ethereum moves sideways at around $1,800.