Forex Today: Dollar weakens amid mixed mood, eyes on mid-tier data

Eren Sengezer FXStreet

Here is what you need to know on Tuesday, March 15:

The dollar is struggling to find demand early Tuesday as markets assess the latest Russia-Ukraine headlines and the implications of surging coronavirus cases in Asia. Later in the day, January Industrial Production data from the euro area, ZEW Survey from Germany and the February Producer Price Index (PPI) from the US will be watched closely by investors.

Despite the upbeat Retail Sales and Industrial Production data from China, the Shanghai Composite Index lost nearly 5% on Tuesday as the entire Jilin province and the technology centre Shenzen went into lockdowns due to a record number of coronavirus cases.

On a positive note, Ukrainian President Volodymyr Zelenskyy's adviser said that they were expecting to reach a peace agreement with Russia within a couple of weeks at the earliest or in May at the latest. Nevertheless, US stock index futures are down nearly 0.5% in the early European session and the 10-year US Treasury bond yield is falling 1.5% at 2.1%. Although these market developments point to a risk-averse environment, the US Dollar Index is down 0.3% below 99.00 and the barrel of West Texas Intermediate (WTI) is losing more than 4% at $98.00.

EUR/USD closed the first day of the week little changed near 1.0900 and gained traction early Tuesday. The pair was last seen testing 1.1000.

GBP/USD trades in positive territory near 1.3050. The data published by the UK's Office for National Statistics revealed that the ILO Unemployment Rate declined to 3.9% in three months to January from 4.1%.

Gold registered large losses on Monday and stays under heavy bearish pressure on Tuesday. XAU/USD was last seen losing nearly 1% on a daily basis at $1,935.

Despite the broad-based dollar weakness, USD/CAD is clinging to modest daily gains near 1.2850 as falling crude oil prices make it difficult for the commodity-sensitive loonie to find demand.

USD/JPY reached its highest level since January 2017 at 108.44 during the Asian trading hours on Tuesday but reversed its direction. Pressured by retreating US T-bond yields, the pair trades below 118.00 in the early European session.

Bitcoin rose nearly 5% on Monday but turned south on Tuesday after failing to reclaim $40,000. Ethereum staged a rebound on Monday but failed to hold above $2,600. ETH/USD was last seen falling toward $2,500, losing more than 2% on the day.

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.

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