Here is what you need to know on Wednesday, August 31:

Markets remain relatively muted mid-week as investors await the inflation data from the euro area. In the second half of the day, the ADP's new employment report for the private sector will be featured in the US economic docket. In the early European morning, US stock index futures are up more than 0.5% and the benchmark 10-year US Treasury bond yield holds steady at around 3.1%. After having closed the second straight day virtually unchanged on Tuesday, the US Dollar Index continues to move sideways below 109.00.

ADP Jobs Preview: Three reasons to expect the data to drive the dollar higher.

Earlier in the day, the data from China showed that the NBS Manufacturing PMI edged higher to 49.4 in August from 49 in July. Additionally, the Non-Manufacturing PMI arrived at 52.6, bettering the market expectation of 52.6. Despite the upbeat data, the Shanghai Composite Index was last seen losing nearly 1% on a daily basis. Investors grow increasingly concerned over a long-lasting slowdown in the Chinese economy after authorities decided to impose tougher coronavirus-related restrictions in cities including Shenzen, Chengdu and Dalian.

EUR/USD managed to hold above parity and registered small daily gains on Tuesday. The Annual Harmonised Index of Consumer Prices (HICP) in the euro area is expected to rise to 9% in August's flash estimate from 7.9% in July. Several European Central Bank (ECB) policymakers voiced their willingness to consider a 75 basis points rate hike in September and helped the shared currency stay resilient against its rivals. Meanwhile, with the Nord Stream pipeline shutting down for maintenance for three days, gas flows to Europe got fully halted and natural gas futures rose as much as 5% in the European morning. As of writing, EUR/USD was trading modestly higher on the day at 1.0020.

Eurozone Inflation Preview: Hotter HICP to cement a 75 bps ECB hike next week.

With crude oil prices falling nearly 5% on Tuesday, the USD/CAD pair gathered bullish momentum and climbed to the 1.3100 area before going into a consolidation phase below that level on Wednesday. Statistics Canada will release the second-quarter Gross Domestic Product (GDP) data later in the session, which is expected to show that the Canadian economy expanded at an annualized rate of 4.5% in the second quarter.

GBP/USD registered its lowest daily close since March 2020 at 1.1655 on Tuesday. The pair erased a portion of its daily losses early Wednesday but it continues to trade below 1.1700.

USD/JPY started to stretch lower following Tuesday's failed attempt to break above 139.00. The pair trades in negative territory below 138.50 in the European morning. "Bank of Japan decided to maintain its easy policy bias at July meeting, hope to discuss at September policy meeting whether it should continue doing so based on data available at the time," BOJ monetary policy board member Junko Nakagawa said earlier in the day.

Gold lost nearly 0.8% on Tuesday as the 10-year US T-bond yield held comfortably above 3%. XAU/USD is having a tough time reversing its direction and was last seen posting small daily losses at around $1,720.

Bitcoin failed to build on Monday's gains and lost more than 2% on Tuesday. Nevertheless, BTC/USD holds above $20,000 so far on Wednesday. Despite having closed in the red on Tuesday, Ethereum regathered its bullish momentum and was last seen rising nearly 4% on the day near $1,600.