Here is what you need to know on Friday, March 3:
The choppy action in financial markets continue in the second half of the week as investors assess the latest central bank commentary and data releases. The US Dollar Index stays on the back foot early Friday following Thursday's rebound and the 10-year US T-bond yield retreats toward 4%. ISM will release the February US Services PMI report later in the day and several FOMC members, including Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman, will be delivering speeches ahead of the weekend.
ISM Services PMI Preview: Strong figure set to catapult US Dollar to new highs.
The data published by the US Bureau of Labor Statistics revealed on Thursday that Unit Labor Costs rose by 3.2% in the fourth quarter. This reading came in much higher than the market expectation of 1.6% and provided a boost to US Treasury bond yields. In turn, the US Dollar continued to outperform its major rivals and Wall Street's main indexes turned south after the opening bell. In the second half of the American session, however, the improving risk mood limited the USD's upside and helped US stocks rebound. Bostic said late Thursday that he was in favor of a 25 bps rate hike at the next policy meeting and noted that they could be in a position to pause the current tightening cycle by mid to late summer.
US February ISM Services PMI Preview: Will it influence Fed rate hike bets?
During the Asian trading hours, the data from China revealed that the business activity in the service sector expanded at a more robust pace in February than expected with the Caixin Services PMI climbing to 55 from 52.9 in January. The Shanghai Composite Index is up more than 0.5% and Hong Kong's Hang Seng Index remains on track to post a daily gain of 1%. Nevertheless, US stock index futures trade mixed in the European morning.
Supported by the upbeat Chinese data, AUD/USD stays in positive territory slightly above 0.6750 and NZD/USD clings to modest daily gains above 0.6200.
EUR/USD failed to capitalize on stronger-than-expected inflation data for February on Thursday and closed the day in negative territory, erasing a large portion of the gains it recorded on Wednesday. The pair stays quiet early Friday and trades modestly higher on the day above 1.0600. European Central Bank (ECB) Vice-President Luis de Guindos will speak on monetary policy at 0900 GMT. Eurostat will release the Producer Price Index (PPI) data for January.
GBP/USD suffered heavy losses and closed below 1.2000 on Thursday. The pair seems to have gone into a consolidation phase early Friday and was last seen trading near 1.1980. Former British Prime Minister Boris Johnson said on Thursday that the new Brexit deal for Northern Ireland was not about the UK taking back control and added that he will find it "very difficult" to vote for it.
USD/JPY snapped a three-day losing streak on Thursday but seems to be struggling to preserve its bullish momentum, trading near 136.50 early Friday.
Gold price benefited from the strong PMI data from China and extended its rebound during the Asian trading hours on Friday. XAU/USD was last seen trading above $1,840.
Bitcoin came under heavy bearish pressure early Friday and fell below $22,000 for the first time since mid-February before recovering modestly. At the time of press, BTC/USD was down nearly 5% on the day at $22,350. Following Thursday decline, Ethereum continues to push lower on Friday and was last seen trading at $1,560, where it was down 5.1% on the day.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD closes in on 1.0700 amid broad USD strength
EUR/USD came under renewed bearish pressure in the American session and dropped to its lowest level since late March near 1.0700. Stronger-than-forecast PCE inflation data and hawkish comments from Fed's Mester provide a boost to the US Dollar and weigh on the pair.
GBP/USD loses bullish momentum after US data, falls below 1.2350
GBP/USD has reversed its direction and erased a large portion of its daily gains on Friday after the data from the US showed that the annual core PCE inflation edged higher to 4.7% in April. Although the pair clings to small daily gains below 1.2350, it remains on track to end the third straight week in negative territory.
Gold erases daily gains, holds above $1,940
Gold price turned south and declined to the $1,940 area in the American session on Friday. The benchmark 10-year US Treasury bond yield holds stead above 3.8% after stronger-than-expected core PCE inflation data from the US, not allowing XAU/USD to gain traction.
Ethereum price to outpace Bitcoin price as ETH jumps over key hurdle where BTC fumbles
ETH is working on its recovery after it dipped to a two-week low on Thursday. While Bitcoin price has failed to make a similar move and head back above $26,500, Ethereum is outpacing Bitcoin and has been able to push above $1,800.
Ford Stock: New agreement will give customers access to 12,000 Tesla chargers
Ford (F) stock has advanced about 2.5% early Friday following CEO Chris Farley’s announcement that Ford owners will be able to charge their EVs at Tesla Superchargers beginning in early 2024.