Forex Today: Dollar pushes higher alongside US yields to start the week

Eren Sengezer FXStreet

Here is what you need to know on Monday, March 28:

The greenback is gathering strength against its major rivals at the beginning of the week supported by rising US Treasury bond yields. The negative shift witnessed in risk sentiment is providing an additional boost to the dollar as well. February Trade Balance data and the Federal Reserve Bank of Dallas' Texas Manufacturing Survey will ve featured in the US economic docket on Monday. Bank of England Governor Andrew Bailey is scheduled to deliver a speech during the European Trading hours as well.

On Sunday, China announced that a two-phase lockdown for Shanghai had been launched amid the rising number of coronavirus infections. Meanwhile, Ukrainian President Volodymyr Zelenskyy said that they will insist on sovereignty and territorial integrity in the next round of talks with Russia. US stock index futures are down between 0.4% and 0.5% early Monday, reflecting the souring market mood.

After the Bank of Japan announced in the Asian session that it will offer to buy an unlimited amount of 10-year Japanese government bonds at 0.25%, USD/JPY surged to its highest level since December 2015. The pair was last seen rising nearly 1% on a daily basis above 123.00.

EUR/USD stays on the back foot after closing the previous three trading days in the negative territory and trades in negative territory below 1.1000. Earlier in the day, European Central Bank President Christine Lagarde noted that incoming data were not pointing to a material risk of stagflation. "In all scenarios, inflation is expected to decrease and settle at levels around the bank's 2% target in 2024," Lagarde added.

GBP/USD dropped to a fresh six-day low of 1.3131 early Monday before rebounding toward 1.3150. BOE Governor Bailey's speech at 1100 GMT is titled "Macroeconomic and financial stability in changing times."

Gold fell sharply to start the week amid surging US T-bond yields. The benchmark 10-year US T-bond yield is up more than 1% at 2.5% early Monday and XAU/USD is down 1.2% at $1,935.

Bitcoin gained more than 5% on Sunday and touched its highest level since late December at $47,694 before retreating to $47,000 in the early European morning. Ethereum is trading at its highest level in more than two months at $3,300 after rising 15% last week.

Author

Eren Sengezer

FXStreet

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.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.