Forex Today: Fiscal stimulus and yields provide support to the greenback

FXStreet Team FXStreet

What you need to know on Monday, March 15:

The American dollar eased heading into the weekly close against most major rivals, although retained its dominant strength. US Treasury yields provided support to the greenback, reaching fresh one-year highs. The bond market volatility is expected to continue leading the way this week.

Wall Street closed mixed on Friday, with the DJIA and the S&P reaching all-time highs, but the Nasdaq falling amid the persistent sell-off in the tech sector.

Vaccine rollout and fiscal stimulus lift hopes for a sooner economic comeback in the US.

The main event this week is the US Federal Reserve Monetary Policy meeting. The central bank is expected to announce its decision next Wednesday, although it’s widely anticipated to remain on hold.

The greenback finished the week with gains only against safe-haven CHF and JPY. High-yielding rivals posted modest gains, with commodity-linked currencies doing better than European ones.

Gold closed the week with gains at $1.726,50 a troy ounce, but crude oil prices were little changed, with WTI at $ 65.50 a barrel.

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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.