Forex Today: A pitch of optimism helps high-yieldings to bounce, Dollar still King

Valeria Bednarik FXStreet

What you need to take care of on Friday, March 4:

Risk aversion kept leading the way on Thursday amid the war crisis undergoing in Eastern Europe. Russian stocks' market remains closed, but shares of EU companies with a Russian exposure plunged. Meanwhile, the country is at the brink of default amid the global sanctions. Nevertheless, attacks on Ukraine continued, and Russian President Vladimir Putin told his French counterpart Emmanuel Macron that the goals of Russia's operation in Ukraine would be achieved in any case.

Wall Street opened with substantial gains but quickly turned red amid concerns related not only to the war but also to an aggressive US Federal Reserve. In his second day before Congress, chief Jerome Powell said that policymakers are prepared to raise rates by more than 25 bps in upcoming meetings, further denting demand for high-yielding assets.

The mood improved, and stocks bounced, putting a halt to the dollar's rally, on news coming from Ukraine. Kyiv said it reached a tentative agreement with Russia to organize safe corridors to evacuate civilians. Under the agreement, a ceasefire would be observed where safe corridors are created. Also, the third round of talks has been announced for next week.

Meanwhile, Bank of Canada Governor Tiff Macklem noted that he would not rule out a 50-basis-point increase in the future, as there is plenty of room to boost interest rates this year.

The EUR/USD pair plummeted to 1.1032, its lowest since May 2020, amid demand for safety. The pair hovers around 1.1060 while heading into the daily close. GBP/USD trades in the 1.3350 area.

The aussie was among the best performers, as AUD/USD hit a fresh 2022 high of 0.7347, holding nearby ahead of the Asian opening. The USD/CAD pair edged higher and settled at around 1.2675, as crude oil prices finally gave up a bit.

Gold Prices edged marginally higher. Spot gold trades at around $1,933.00 a troy ounce, having spent the day within Wednesday's range. WTI peaked at $116.51 a barrel but currently trades at around $108.00.

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Sentiment turns as the U.S. looks to regulate cryptos

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

AUD/USD holds steady near 0.7200 amid escalating US-Iran tensions

AUD/USD consolidates just below its highest level since mid-May, touched on Friday, and hovers around 0.7200 at the start of a new week amid mixed cues. Hawkish RBA expectations continue to act as a tailwind for the Aussie. Meanwhile, the upbeat US NFP report lifted Fed rate hike bets, which, along with escalating US-Iran tensions, underpins the safe-haven US Dollar and caps the currency pair.

USD/JPY slides to test 154.00 on aggressive hawkish BoJ repricing

USD/JPY accelerates its decline and tests 154.00 in the European session on Monday as an aggressively hawkish BoJ repricing continues to drive the Japanese Yen higher. Meanwhile, the US Dollar faces headwinds from US debt worries and uncertainty about the Fed's policy outlook ahead of Friday's US CPI data release.

Gold recovers intraday losses to sub-$4,400 as USD slumps despite Fed rate hike bets

Gold shows some resilience below the $4,400 mark, and recovers intraday losses during the first half of the European session. Any meaningful upside, however, seems limited as traders might opt to wait on the sidelines ahead of the latest US inflation figures, due later this week.

Bittensor: TAO eyes $300 amid launch on Raydium, parody meme coin, ChatGPT-6 Astra release

Bittensor is trading in the green on Monday, continuing a steady upward trend over the last five days, with a 25% gain. Social chatter surrounding Bittensor is increasing amid a similarly named meme coin launched on Solana and the release of ChatGPT-6 Astra. The technical outlook for TAO is bullish as momentum strengthens and buyers target the $300 breakout.

Strong US jobs, Middle East tensions and key inflation data ahead

Good morning all, hope you enjoyed your weekend. Markets are starting the week after Friday’s stronger-than-expected US jobs report, which increased expectations that the Fed could raise rates at its September meeting. However, US markets are closed today for the Labor Day holiday, so liquidity should be lower and we may see slower price action.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.