Forex Today: The calm before the storm?
|What you need to know on Thursday, March 11:
The greenback remained under mild pressure amid weaker US government bond yields. The US government auctioned 10-year notes at 1.523%, which were hovering around 1.51% ahead of the auction, below Tuesday’s close at 1.55%. The dollar’s losses are modest when compared to its latest gains. Weaker-than-expected US inflation figures added pressure on the American currency.
The US House passed President Joe Biden’s stimulus bill, which he intents to sign next Friday at the White House. The headline gave a late boost to stocks, with Wall Street posting substantial gains. President Biden is also due to deliver a prime-time address on Thursday marking the 1-year anniversary of the coronavirus-related shutdowns.
The Bank of Canada held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. “The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week. The global economy is recovering from the economic effects of COVID-19, albeit with ongoing unevenness across regions and sectors,” according to the official announcement.
The EUR/USD pair settled at the upper end of its daily range around 1.1920, while GBP/USD settled around 1.3930. Commodity-linked currencies also strengthened modestly against the greenback, although without breaking any relevant level.
Gold benefited the most from the broad dollar’s weakness and rising stocks, ending the day around $1,725 a troy ounce. Crude oil prices were just marginally higher, with WTI ending the day at $64.40 a barrel.
The focus now shifts to the ECB Monetary Policy decision on Thursday.
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