Forex Today: Dollar’s momentum could suffer from stimulus news

FXStreet Team FXStreet

What you need to know on Monday, March 1:

The greenback appreciated sharply at the end of the week, finishing it with gains against all of its major rivals. Global indexes closed with sharp losses, except for the Nasdaq that managed to post an intraday advance.

US Treasury yields continued to retreat ahead of the weekly close, but that didn’t prevent the dollar from appreciating. The yield on the benchmark 10-year Treasury note settled at 1.40% after peaking at a one-year high of 1.61% mid-week.

The EUR/USD pair settled just above the 1.2060 support, while GBP/USD ended at 1.3930. Commodity-linked currencies were the most hit by the greenback’s strength, and are at risk of extending their slumps.

Gold plunged to a fresh 2021 low of $1,717.14 a troy ounce, while oil prices also retreated, although WTI settled at $61.50 a barrel.

On Saturday, the US House of Representatives passed President Joe Biden's $1.9 trillion coronavirus relief package by 219-212 votes. Republican support was missing, but the bill moved to the Senate, where is expected to pass before March 14, when the previous round of stimulus expires. Also on Saturday, President Biden called on the Senate to pass the stimulus bill.

Over the weekend, news pointed out that UK finance minister Rishi Sunak would announce this week 5 billion pounds of additional grants to help businesses hit by the pandemic, in his budget statement next Wednesday.

Bitcoin Price Analysis: BTC could try to reclaim $50K as selloff loses momentum at key support

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EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.