Forex Today: Dollar keeps rallying, gold plummets

FXStreet Team FXStreet

What you need to know on Thursday, February 18:

Demand for the greenback persisted, backed by higher US Treasury yields, as those on long-term government debt reached fresh one-year highs. Upbeat US Retail Sales, probably as a result of stimulus checks, further supported the American currency.

The FOMC published the Minutes of their latest meeting, which showed that policymakers believe it’s premature to talk about tapering QE, as assets purchases would remain at current levels until Q1 2022. Policymakers also noted that the pace of the economic recovery has moderated in recent months.

European indexes closed in the red, but US ones managed to trim most of their early losses following the release of the FOMC Meeting Minutes, amid renewed hopes for more easy money coming.

The shared currency was the worst performer, nearing 1.2000 against its American rival. GBP/USD lost the 1.3900 threshold but the downside remains limited by upbeat UK inflation figures.

Gold prices plummeted. The bright metal traded as low as $1,769.40 a troy ounce, a fresh 2021 low, ending the day around 1,774. Crude oil prices began the day with the wrong footing, but recovered ahead of the close, amid output disruptions in the US due to freezing temperatures in Texas.

European restrictive measures due to the ongoing pandemic will likely continue. Vaccines´ roll-out goes slowly but marching, yet the number of new cases is far from optimal. In the UK Prime Minister Boris Johnson said that restrictive measures will be lifted with caution, adding that he expects the process to be irreversible.

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EUR/USD flat lines below 1.1900; divergent Fed-ECB expectations offer support

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.

GBP/USD slips heading into the Thursday trading window

The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.

Gold holds losses near $5,050 despite renewed USD selling

Gold price trades in negative territory near $5,050 in Thursday's Asian session. The precious metal faces headwinds from stronger-than-expected US employment data, even as the US Dollar sees a bout of fresh selling. All eyes now remain on the next batch of US labor statistics.

Crypto trades through a confidence reset

The cryptocurrency market is navigating a liquidity-driven reset rather than a narrative-driven rally. Bitcoin, Ethereum and major altcoins remain under pressure even as new exchange-traded fund filings continue and selected inflow days appear on the tape.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.