|

Forex Today: Dollar edges higher on rising yields ahead of EU sentiment, US inflation

Here is what you need to know on Tuesday, April 12:

In the absence of high-tier macroeconomic data releases on Monday, the dollar capitalized on safe-haven flows and continued to gather strength against its rivals. Ahead of the ZEW sentiment survey results for the euro area and Germany, markets remain risk-averse early Tuesday. Later in the day, the Consumer Price Index (CPI) data will be featured in the US economic docket. Meanwhile, the 10-year US Treasury bond yield is sitting at its highest level since December 2018 above 2.8%. A 10-year US Treasury note auction will be held at around 1700 GMT. 

US Consumer Price Index March Preview: Federal Reserve policy affirmed.

The UK's Ministry of Defence said on Tuesday that they were expecting fighting in eastern Ukraine to intensify over the next two or three weeks. Earlier in the day, Ukrainian President Volodymyr Zelenskyy noted that they take the threat of Russia using chemical weapons seriously. Additionally, Germany's foreign minister announced on Monday that EU foreign ministers had agreed to ramp up weapon deliveries to Ukraine. Reflecting the sour market mood, US stock index futures are down between 0.3% and 0.5% in the European morning. 

EUR/USD recovered to 1.0950 on Monday but turned south in the second half of the day to close below 1.0900. The pair stays under modest bearish pressure early Tuesday. The ZEW survey is expected to unveil a deterioration in Economic Sentiment in the eurozone and Germany in April. Germany's Destatis announced earlier in the day that the annual HICP inflation climbed to 7.6% in March, matching the flash estimate and the market expectation.

GBP/USD stays on the back foot and edges lower toward 1.3000. The UK's ONS reported on Tuesday that the ILO Unemployment Rate declined to 3.8% in three months to February. Wage inflation, as measured by Average Earnings Including Bonus, rose to 5.4% on a yearly basis from 4.8% in January.

USD/JPY continues to push higher and trades at its strongest level since June 2015 above 125.50. The benchmark 10-year US Treasury bond yield, which gained more than 13% last week, is already up 4% this week.

Gold touched a fresh multi-week high near $1,970 on Monday on the back of safe-haven flows but retreated below $1,960. XAU/USD fluctuate in a relatively tight channel at around $1,955 in the European session.

Bitcoin fell to its lowest level in nearly a month on Monday and trades within a touching distance of $40,000 early Tuesday. Ethereum tests the $3,000 handle after losing 7% on Monday.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

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 stays weak below 156.00 on aggressive hawkish BoJ repricing

USD/JPY stays in the red below 156.00 in the European session on Monday as 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 sticks to losses as bears await acceptance below $4,400 amid Fed rate hike bets

Gold attracts some sellers for the second straight day, though it lacks follow-through, and hovers around the $4,400 mark heading into the European session. Moreover, the commodity holds above Friday's swing trough, touched in reaction to the upbeat US monthly employment details, warranting some caution for bearish traders before positioning for any further losses.

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.