Here is what you need to know on Tuesday, March 2:
Safe-haven flows took control of markets in the second half of the day on Tuesday as Russia's ongoing aggression against Ukraine despite harsh sanctions imposed by western nations forced investors to seek refuge. Market participants are increasingly worried about the potential negative impact of a prolonged Russia-Ukraine war on global economic activity. Inflation data from the euro area and the ADP's private sector employment for the US will be featured in Wednesday's economic calendar. More importantly, delegations from Russia and Ukraine are set to meet for the second round of peace talks. Finally, FOMC Chairman Jerome Powell will testify before the House Committee on Financial Services at 1500 GMT.
Powell Preview: Rethink because of the war? Not so fast, Fed set to remain on track, dollar to rise
The greenback outperformed its rivals on Tuesday and the US Dollar Index gained 0.7% before settling near 97.50 early Wednesday. The 10-year US Treasury bond yield lost nearly 6% and touched its lowest level since early January below 1.7%. The barrel of West Texas Intermediate rose more than 10% and was last seen trading at its highest level since September 2013 at $109.30. The S&P 500 erased 1.5% on Tuesday and S&P 500 futures are trading flat so far on the day.
EUR/USD fell below 1.1100 for the first time since June 2020 on Tuesday. Following a technical correction during the Asian trading hours on Wednesday, the pair started to edge lower toward 1.1100 heading into the European session.
GBP/USD came under heavy bearish pressure during the American session on Tuesday and extended its slide early Wednesday. The pair is trading in the negative territory below 1.3300.
USD/CAD registered gains on Tuesday but stays on the back foot Wednesday morning. Rising crude oil prices seem to be helping the commodity-related loonie stay relatively resilient against the dollar. Later in the day, the Bank of Canada will announce its policy decision and it's expected to hike its policy rate by 25 basis points to 0.5%.
The data from Australia showed earlier in the day that the economy grew by 4.2% on a yearly basis in the fourth quarter. This print beat the market expectation of 3.7% and allowed the AUD to find demand. Despite the broad-based dollar strength, AUD/USD is posting small daily gains above 0.7250.
Gold continued to attract investors and skyrocketed toward $1,950 on Tuesday. XAU/USD is staying relatively quiet below $1,940.
Bitcoin ignored the negative shift witnessed in risk sentiment and managed to push higher on Tuesday. BTC/USD is trading in a relatively tight range near $44,000 early Wednesday. Ethereum registered gains for the second straight on Tuesday but seems to have gone into a consolidation phase after testing $3,000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.