Forex Today: Dollar rises as jittery markets fear bubbles, await Fed officials' speeches


Here is what you need to know on Tuesday, March 2:

After a risk-on Monday, markets are on the back foot on Tuesday following a bubble warning from China. The Fed's dismissal of higher yields boosts the dollar and contrasts the approach from other central banks. Bitcoin is moving up while gold and oil retreat. Speeches from Fed officials are eyed. 

Bubble? Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission warned about bubbles in foreign markets and properties, contributing to a downturn in Asian stocks and US futures. The "turnaround Tuesday" has come after shares rallied on Monday, greeting the new months with optimism. 

The US ISM Manufacturing Purchasing Managers' Index jumped to 60.8 in February, indicating rapid growth. The Prices Paid component leaped above 80, implying inflationary pressures.

US ten-year yields have remained contained around 1.40%, allowing markets to recover on Monday but enough to support the dollar. Thomas Barkin, president of the Richmond branch of the Federal Reserve, dismissed concerns about higher returns on US debt and focused on the fact that ten million Americans are out of work.

Fed Governor Lael Brainard and stands out among speakers on Tuesday, ahead of Chair Jerome Powell's speech on Thursday. The world's most powerful central bank stands out among its peers – officials at the European Central Bank have signaled they are ready to act to push yields lower. EUR/USD is under pressure, nearing 1.20.  Preliminary Consumer Price Index figures from the eurozone for February are set to remain subdued.

See Powell Preview: Three scenarios for the Fed to defuse the bond bonfire, market implications

The US Senate will reportedly pick up President Joe Biden's $1.9 trillion stimulus bill on Wednesday. The upper chamber is set to strip a minimum wage hike out of the House's legislation, but the final scope of relief is unclear. 

Gold extended its downfall, changing hands at around $1,720 at the time of writing. Higher US yields and growing interest in cryptocurrencies have made gold less attractive to some investors. 

The Reserve Bank of Australia left its interest rates unchanged as expected, one day after intervening in markets and scooping up Australian debt. 

Canada publishes Gross Domestic Product figures for the fourth quarter on Tuesday, with a slowdown on the cards. WTI Crude Oil has stabilized around $60 ahead of the OPEC+ meeting on Thursday. Russia is reportedly seeking an increase to petrol production while Saudi Arabia would like to cap output. 

Bitcoin climbed back to around $49,000, benefitting from interest from Citibank among others. Ethereum and XRP lag behind.

Five factors moving the US dollar in 2021 and not necessarily to the downside

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.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!
   

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Demand for high-yielding assets likely to continue

The EUR/USD pair reached1.2171 last Friday, its highest since March 1, closing the week a few pips below such a high. Wall Street reached all-time highs, while US government bond yields plunged. EUR/USD is overbought but still has room to extend its advance.

EUR/USD News

GBP/USD: Scottish election’s result may take its toll on pound

 The British Pound took advantage of the broad dollar’s weakness, and GBP/USD  surged to 1.4005, retreating just modestly ahead of the close to settle around 1.3990. GBP/USD is technically bullish, could advance once above 1.4015 resistance.

GBP/USD News

Gold could target 200-day SMA

Gold extended its rally after surging above $1,800 on Thursday. During the first half of the week, the XAU/USD pair struggled to rise above $1,800 and fluctuated in a horizontal channel. The next target on the upside aligns at $1,850.

Gold News

Judge reaffirms order SEC must produce documents on Bitcoin, Ether and XRP in Ripple case

Ripple's victory granted the firm access to the SEC's documents on the three leading cryptocurrencies. The regulatory agency recently denied the possession of these documents.

More Dogecoin News

S&P 500 and Nasdaq: Can the Fed pump anymore after weak jobs report

Well, that was an interesting jobs report. Not too many people were forecasting that one. Just in case you missed it NFP were forecast to come in around the 1 million jobs gained but instead the US only added 266k.

Read more

Forex MAJORS

Cryptocurrencies

Signatures