Here is what you need to know on Wednesday, September 7:

The greenback outperformed its rivals on Tuesday on the back of upbeat ISM Services PMI data and preserved its strength early Wednesday with the US Dollar Index reaching a new multi-decade high above 110.50. Investors remain cautious mid-week as focus shifts to central bank events. Bank of England (BoE) Monetary Policy Hearings will take place at 0900 GMT and the Bank of Canada (BoC) will announce its interest rate decision at 1400 GMT. Eurostat will release the second-quarter employment change and the Gross Domestic Product (GDP) growth data ahead of the European Central Bank's (ECB) policy announcements on Thursday. During the American trading hours, several FOMC policymakers will be delivering speeches and the Fed will publish its Beige Book.

After having opened slightly higher on the day, Wall Street's main indexes closed in negative territory on Tuesday as investors ramped up hawkish Fed bets after stronger-than-expected PMI reading. According to the CME Group FedWatch Tool, markets are currently pricing in a 74% probability of a 75 basis points Fed rate hike in September, compared to 57% early Tuesday. In turn, the benchmark 10-year US Treasury bond yield gained nearly 4% on Tuesday and touched its strongest level since-mid June before going into a consolidation phase at around 3.35%.

AUD/USD lost nearly 100 pips on Tuesday despite the Reserve Bank of Australia's decision to hike the policy rate by 50 basis points. During the Asian trading hours on Wednesday, the pair continued to push lower and touched its weakest level in six weeks at 0.6700. The data from Australia showed earlier in the day that the GDP grew at an annualized rate of 3.6% in the second quarter, slightly better than the market expectation of 3.5%, but failed to help the AUD gather strength. Meanwhile, the data from China revealed that the Exports and Imports expanded at a softer pace than expected on a yearly basis in August.

In an interview with Eurofi magazine, several ECB policymakers sounded relatively cautious with regard to aggressive policy tightening. During the American trading hours on Tuesday, EUR/USD came under renewed bearish pressure and touched its weakest level in 20 years below 0.9900. The pair clings to modest recovery gains above 0.9900 early Wednesday. 

Reports suggesting that incoming UK Prime Minister Liz Truss was planning to freeze energy prices for households for 18 months helped the British pound stay resilient against its major rivals. In a speech delivered on Tuesday, Truss reiterated that she will cut taxes to reward hard work and added that she will take action on the energy crisis and unveil her plan as early as this week. GBP/USD stays relatively quiet at around 1.1500 early Wednesday.

The unabated JPY selloff continued early Wednesday and USD/JPY reached a fresh multi-decade high above 144.00. The pair is up already more than 400 pips so far this week. When asked about currency intervention, "we will take necessary steps," Japanese Finance Minister Shunichi Suzuki said on Wednesday. This comment was largely ignored by market participants as the USD/JPY was last seen rising nearly 1% on the day at 144.15.

USD/CAD trades within a touching distance of 1.3200 on Wednesday. The BoC is widely expected to raise its policy rate by 75 basis points to 3.25%. 

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Gold made a sharp U-turn in the second half of the day on Tuesday and suffered heavy losses amid surging US Treasury bond yields. XAU/USD trades in negative territory slightly below $1,700 early Wednesday.

Bitcoin dropped below its weekly training range on Tuesday and was last seen trading at around $18,800. Ethereum continues to stretch lower toward $1,500 after having lost more than 3% on Tuesday.