Dollar Bounces Back on Rising Rates, Yen Suffers

The US dollar has made a comeback after consolidating softer yesterday. The Dollar Index (DXY) is trading higher today, which is not uncommon when US interest rates are rising. However, this does not necessarily reflect the current market sentiment or expectations.

The Bank of Japan's efforts to support the yen are being met with resistance as the dollar trades above JPY160, despite widespread conviction that the BoJ will raise rates later this month.

The US manufacturing PMI for August has been released, showing a slight decline to 53.2 from 53.9 in July. This represents the slowest growth since March, but the figure is subject to revision today.