Forex Today: Modest US Dollar comeback

Valeria Bednarik FXStreet

What you need to take care of on Thursday, February 9:

The US Dollar ended Wednesday mixed, as the optimism triggered by US Federal Reserve Chairman Jerome Powell faded throughout the day. European stock indexes managed to post modest advances, but Wall Street settled in the red. Still, US government bond yields remained steady around Tuesday’s closing levels, limiting the USD strength.

The Euro remains among the weakest US Dollar rivals, currently trading at around 1.0725. European Central Bank (ECB) officials were on the wires repeating their hawkish rhetoric. ECB policymaker Klaas Knot said that headline inflation appears to have peaked but added that keeping the current pace of hikes into May could well be needed if underlying inflation does not materially abate.

Across the pond, Fed Governor Lisa Cook said that the central bank remains focused on restoring price stability, as inflation is still running too high. She added that they would need a restrictive monetary policy for some time. Also, New York Federal Reserve President John Williams said that the labor market is still very strong and noted that they have more work to do on rates, adding data will determine the path of rate hikes. Finally, Fed Governor Christopher Waller warned that interest rates could go higher than expected.

The GBP/USD pair trades around 1.2070, holding on to modest intraday gains.

The Bank of Canada published the newly inaugurated Minutes of its latest monetary policy meeting- The document had no impact on the CAD as the BOC signaled a pause in rate hikes after announcing their decision. USD/CAD trades at around 1.3430.

AUD/USD is down to 0.6920 as the poor performance of Wall Street weighed on the pair. Finally, USD/JPY advanced, now hovering around 131.40.

Spot gold peaked at the beginning of the day at a fresh weekly high of $1,886.31 but quickly retreated, now trading at around $1,874. Crude oil prices, on the other hand, maintained the positive momentum, and WTI currently trades at $78.40 a barrel.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD remains offered, challenges the 200-day SMA

EUR/USD adds to the current leg lower and comes just pips away from its significant 200-day SMA around 1.1580 as the NA session draws to a close on Thursday. The deeper drop comes in response to the intense advance in the Greenback, this time propped up by firm US data and higher US Treasury yields.

GBP/USD drops to four-week lows near 1.3360

Moving in step with other risk-sensitive peers, GBP/USD is attracting heavier selling and has slipped below the key 1.3400 support on Thursday to hit fresh four-week troughs. Cable’s decline reflects a firmer US Dollar as investors keep evaluating the latest batch of US data.

Gold remains offered just above $4,600

Gold is giving back part of its recent strong run, managing to bounce off earlier lows and reclaim the area beyond the $4,600 mark per troy ounce on Thursday. The pullback comes as the Greenback regains traction, Treasury yields move higher, and some profit-taking kicks in.