Forex Today: No lasting changes to risk mood ahead of mid-tier data

Eren Sengezer FXStreet

Here is what you need to know on Tuesday, March 8:

The greenback weakened slightly against its major rivals in the early American session on Monday but didn't have a difficult time regathering its strength with safe-haven flows remaining in control of markets. After rising 0.75% on Monday, the US Dollar Index seems to have gone into a consolidation phase above 99.00 early Tuesday. Fourth-quarter Employment Change and GDP data will be featured in the European economic docket ahead of January Goods Trade Balance and IBD/TIPP Economic Optimism Index figures from the US.

Following the third round of talks between the Russian and Ukrainian delegations on Monday, sides have failed to make any progress in reaching a truce or ceasefire. Speaking on the matter, a Ukrainian negotiator noted that "small positive developments" were made on the issue of humanitarian corridors. The S&P 500 Index lost nearly 3% on Monday and US stock index futures are losing between 1.2% and 1.5% in the early European morning.

According to the Financial Times, the European Union is planning to cut Russian gas imports by two-thirds in the next 12 months. Meanwhile, Reuters reported that the US could act alone to ban Russian oil imports without the participation of its European allies. The barrel of West Texas Intermediate gained 5% on Monday and was last seen rising 2% on a daily basis at $122.70.

EUR/USD came within a touching distance of 1.0800 during the European trading hours on Monday but managed to erase a small portion of its daily losses. The pair is moving sideways near 1.0850 early Tuesday.

GBP/USD lost more than 100 pips on Monday and struggles to make a meaningful recovery on the second day of the week. The pair is trading at its lowest level since October 2020 near 1.3100.

USD/JPY closed in positive territory on Monday and continues to edge higher toward 115.50 on Tuesday. Earlier in the day, Bank of Japan (BOJ) Governor Haruhiko Kuroda said that it would not be appropriate to tighten the policy or withdraw stimulus even if energy and commodity costs push up inflation.

After staying surprisingly resilient against the dollar last week, the AUD came under selling pressure during the Asian trading hours. Australia announced that it will be imposing new targeted sanctions on the Armed Forces of the Russian Federation. AUD/USD was last seen losing 0.5% on the day at 0.7285.

Gold continues to capitalize on safe-haven flows and trades at its highest level since August 2020 above $2,010 in the early European session.

Bitcoin declined to $37,000 on Monday but staged a modest recovery. BTC/USD is trading in a narrow band above $38,000. After posting losses in the previous two days, Ethereum stays relatively quiet and clings to modest daily gains near $2,500 on Tuesday.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.