The jittery sentiment that prevailed last week with the delay of U.S. debt ceiling decision ended this week with the U.S. debt deal which included the increase of debt ceiling by $2.1 trillion and cut in the budget deficit by $2.5 trillion over the coming 10 years.

Meanwhile, there is some optimism in markets which enhanced demand on high-yielding currencies at the expense of refuges, except for the Swiss franc that remained firm against majors.

In addition, the better-than-expected Chinese PMI manufacturing reading helped the bullish sentiment as investors reckoned the three interest rate hikes by the Chinese central bank did not have much impact on growth.

On the other hand, the downbeat manufacturing data from the euro area and U.K. did not have negative impact on both euro and sterling as they are currently trading higher against the U.S. dollar and yen.

European manufacturing showed further decline in July where it recorded 50.4 in July from 52.0, while U.K. manufacturing sector contracted to 49.1 in July relative to the revised 51.4.

The yen was the biggest loser followed by the greenback which fell against a basket of major currencies to 73.60 compared with the day's starting level of 73.83.

Still, the green currency is traded around eight-month low versus the franc and four-month low against the yen before U.S. ISM manufacturing report which is predicted to show a cool down in expansion to 54.5 in July from 55.3 a month earlier.

With regard the euro-dollar pair, it advanced for the second day to trade around 1.4440 after recording a high of 1.4453 and a low of 1.4344.

The trading range for this week is among the major support at 1.4040 and the major resistance at 1.4620.

Moving to the British pound versus the yen, it rose slightly on the daily basis, pushed up by the upbeat general sentiment which sapped demand on low-yielding currencies.

Meanwhile, the pair is trading at 126.82, after touching a high of 128.49 and a low of 126.51, whereas the trading range for the week is among the major support at 123.30 and the major resistance at 129.00.

Concerning the USD/CHF pair, it continued its southern bearish direction, targeting new record low, where it is currently trading at 0.7868 after falling from a high of 0.7951 to visit the day's low at 0.7855.

The trading range for this week is among the major support at 0.7700 and the major resistance at 0.8255.