What you need to take care of on Friday, March 3:
The US Dollar erased recent losses and strengthened on the back of US economic data and higher US yields. The greenback held onto gains even amid a late rally in Wall Street. US yields hit fresh highs, with the 30-year rising above 4% and the 2-year at fresh multi-year highs above 4.90%. The DXY rose more than 0.50%, stabilizing around 105.00.
Initial Jobless Claims declined to 190K and Unit Labor Cost for Q4 were revised higher from 1.6% to 3.2%. The figures contribute to the expectation about a more restrictive monetary policy than previously thought by showing extended tightness in the labor market. On Friday, Service sector data is due.
US February ISM Services PMI Preview: Will it influence Fed rate hike bets?
US stocks finished higher after a late rally that started following comments from Federal Reserve’s Bostic mentioning that the central bank “could be in a position to pause by mid to late summer.” On Wednesday the currency market reflected more optimism than equities; that changed on Thursday with currencies reacting only marginally to the rally in Wall Street as majors remained in a small range.
The EUR/USD erased recent gains and pulled back to 1.0570 and EUR/GBP consolidated around 0.8670. Eurozone inflation figures confirmed previous data having no impact on the Euro.
USD/JPY hit levels above the critical 137.00 zone, reaching the highest level in two months, supported by higher yields but it then pulled back. Inflation data for Japan is due.
GBP/USD dropped to test weekly lows at 1.1920, a zone that has become a key short-term support; it then rebounded to 1.1950 after the US Dollar weakened on risk appetite.
The Kiwi pulled back on Thursday but still remains among the top performers of the week. NZD/USD found support at 0.6200 and remains on its way to end a four-week streak of weekly losses. On a quiet session, USD/CAD moved sideways around 1.3600 while AUD/USD lost ground modestly, approaching the 0.6700 critical support.
An unusual steady session for gold that finished flat below $1,840/oz. Bitcoin held above $23,100 and late in the American session rose above $23,500.
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