Forex Today: Dollar regains traction amidst rate cut bets in June

The Greenback extended its auspicious start of the week after US inflation figures came in hotter than expected, reinforcing further the investors’ repricing of a June rate reduction by the Federal Reserve.

Here is what you need to know on Wednesday, March 13:

The USD Index (DXY) reclaimed the area beyond the 103.00 mark amidst rising convictions about the Fed’s start of its easing cycle in the summer. On March 13, a light US docket only includes the weekly MBA Mortgage Applications.

EUR/USD came all the way down to retest the 1.0900 neighbourhood, where some decent contention appears to have emerged. The Industrial Production figures in the broader euro bloc are due on March 13.

Further weakness saw GBP/USD challenge the mid-1.2700s on the back of the stronger Dollar. A very interesting UK calendar will see GDP figures, Construction Output, Goods Trade Balance, Industrial Production and Manufacturing Production, all due on March 13.

Renewed depreciation in the Japanese yen prompted USD/JPY to leave behind several sessions of losses and briefly surpass the 148.00 barrier, always on the back of shrinking expectations that the BoJ could exit its accommodative monetary policy stance at its meeting next week.

AUD/USD corrected further down and breached the 0.6600 support on the back of the stronger Greenback and the weak performance of iron ore.  

Prices of the WTI alternated gains with losses around the $78.00 mark as traders continued to assess the geopolitical factor, an upbeat tone from the OPEC’s monthly report, and the upcoming EIA report on crude oil inventories.

Further improvement in the Dollar in combination with extra upside in US yields across the board motivated Gold prices to recede to the $2,150 region per troy ounce, ending at the same time a nine-session positive streak. Silver prices followed suit and ended Tuesday’s session with marked losses after a move to three-month highs near $24.70 per ounce did not progress.