The FX galaxy seems to have entered a broad-based consolidative phase against the backdrop of rising speculations that major central banks—with the exception of the BoJ—might now take more time to assess the start of the easing cycle.
Here is what you need to know on Wednesday, February 7:
The corrective move in the greenback prompted the USD Index (DXY) to abandon the area of recent yearly highs around 104.60 amidst an equally weak tone in US yields. Balance of Trade figures and a slew of Fed speakers are next on tap on February 7: Kugler, Collins, Barkin, and Bowman.
EUR/USD traded within the familiar range and close to the area of the 2024 low near 1.0720, remaining unable to capitalize on the renewed selling bias in the greenback. Industrial Production results in Germany will be the sole release on Wednesday.
GBP/USD rose markedly and managed to leave behind part of the recent two-day deep retracement, regaining at the same time the area beyond the key 200-day SMA. Across the Channel, BoE Breeden and Woods are due to speak along with the release of the Halifax House Price Index.
USD/JPY broke below the 144.00 support and dropped to two-day lows on the back of the marked downward bias in the greenback coupled with renewed demand for US bonds. In Japan, preliminary readings of the Coincident Index and the Leading Economic Index are due on February 7.
AUD/USD regained some balance and printed marked gains after two daily drops in a row, all in response to the sell-off in the dollar while market participants kept digesting the RBA’s hawkish hold.
In Canada, Balance of Trade results are due on Wednesday, followed by the BoC Summary of Deliberations. USD/CAD partially eroded its recent two-day advance following the weak dollar, while BoC’s T. Macklem asserted that additional time is required for monetary policy to alleviate lingering price pressures.
Prices of WTI added to Monday’s gains and flirted with the 55-day SMA around $73.60 following news that US crude oil production could come short of expectations in 2024.
Prices of both Gold and Silver advanced on Tuesday in response to the poor performance around the greenback, declining yields in the global markets, and a mixed tone in the commodity complex.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.