|

Forex Today: Inflation and rate cut bets come to the fore

The Greenback gathered some fresh upside traction against the backdrop of rising cautiousness prior to the release of US inflation figures measured by the PCE on Thursday. The renewed strengthening of the US Dollar weighed on sentiment and prompted some corrective moves in the risk complex.

Here is what you need to know on Thursday, February 29:

The Greenback regained further balance and prompted the USD Index (DXY) to reclaim the area beyond the 104.00 hurdle despite lower yields. On February 29, all the attention will be on the inflation gauged by the PCE, along with Personal Income, Personal Spending, Pending Home Sales and the usual weekly Initial Jobless Claims. Furthermore, Fed’s Bostic, Goolsbee, and Mester are due to speak.

EUR/USD traded on the defensive for the second straight session, although it managed to bounce off lows near 1.0800. The preliminary Inflation rate tracked by the CPI in the broader euro area takes centre stage on February 29, followed by Germany’s Retail Sales, flash Inflation Rate and the labour market report.

GBP/USD retreated to multi-day lows near 1.2620 on the back of renewed buying interest in the Greenback. Mortgage Approvals and Mortgage Lending are due on February 28.

USD/JPY kept its weekly choppiness well in place above the 150.00 barrier. On February 29, the usual weekly Foreign Bond Investment figures are due, seconded by flash Industrial Production, Retail Sales, Housing Starts and the speech by BoJ’s Hajime.

AUD/USD deflated to two-week lows in the sub-0.6500 region, maintaining its trade below the 200-day SMA. Data-wise, in Oz, comes Housing Credit and advanced Retail Sales on February 29.

Prices of WTI traded in a volatile session after hitting a new 2024 peak around $79.60 per barrel as traders assessed another unexpected build in US inventories, the likelihood of delayed rate cuts by the Fed, and the persistent crisis in the Middle East and the Red Sea, all coupled with speculation of the continuation of supply cuts by the OPEC+.

Prices of Gold clung to their daily gains around the $2,030 region, while Silver prices extended their leg lower, leaving the door open to a potential test of the $22.00 mark per ounce sooner rather than later.

Author

Pablo Piovano

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

More from Pablo Piovano
Share:

Editor's Picks

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.
 

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.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

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.