Forex Today: Markets maintain their focus on rate cut bets

Pablo Piovano FXStreet

Another solid print from the weekly report of the US labour market lent extra support to the Fed’s tighter-for-longer narrative, although the move in the Greenback was limited. Furthermore, room to the Greenback and sponsored a broad-based knee-jerk in the risk-complex, while the generalized upbeat flash readings from PMIs initially bolstered a spike in risk-related assets.

Here is what you need to know on Friday, February 23:

The USD Index (DXY) remained on the back foot amidst the multi-session negative streak, hovering around the 104.00 region along with some recovery in US yields. At the end of the week, only the speech by Fed’s C. Waller is due.

EUR/USD ran out of steam just ahead of 1.0900 the figure on the back of encouraging PMIs, although the late recovery in the Greenback forced spot to relinquish those gains. On February 23, Germany will be in the spotlight with the releases of the final Q4 GDP Growth Rate and the Business Climate tracked by the IFO institute.

GBP/USD traded in quite a volatile fashion, although it managed to clinch to daily gains and extend the weekly bounce for the third straight session. Across the Channel, the GfK Consumer Confidence will be only due on February 23.

USD/JPY added to Wednesday’s advance and climbed further north of the 150.00 milestones. The next event of note in Japan will be the release of January inflation figures on February 27.

In line with their risky peers, AUD/USD left behind the multi-session advance and gave away some gains after briefly flirting with the 0.6600 hurdle. Next on tap in Australia will be the RBA’s Monthly CPI Indicator on February 28.

In China, the House Price Index is due on February 23. USD/CNH managed to regain some balance and chart decent gains past the 7.2000 mark after two consecutive daily pullbacks.

WTI prices rose to the area of monthly highs near the $79.00 mark per barrel amidst rising geopolitical jitters and another unexpected build in US crude oil supplies.

Gold prices partially set aside several sessions of gains and settled around the $2,020 zone per troy ounce, while its cousin Silver retreated for the fourth day in a row, revisiting weekly lows near $22.70 per ounce.

Author

Pablo Piovano

FXStreet

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

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Crypto Today: Bitcoin and Ethereum edge lower, XRP extends recovery as macro headwinds weigh

The broader cryptocurrency market is consolidating on Friday, with Bitcoin paring losses slightly above $84,000. Ethereum declines in tandem with BTC. Ripple (XRP), meanwhile, paints a different picture.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Federal Reserve (Fed) and the Bank of Japan (BoJ) have just done something remarkably similar. Both central banks raised interest rates by 25 basis points (bps) last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.