Forex Today: Sentiment improved but the US Dollar remains strong ahead of US CPI

Valeria Bednarik FXStreet

What you need to take care of on Tuesday, February 14:

Tensions between the US and China weighed on the market mood at the weekly opening, with the Greenback making the most out of it. However, a better market mood during European trading hours pushed the US Dollar into the red across the FX board.

Still, the absence of relevant macroeconomic releases and the upcoming US Consumer Price Index update limited the intraday US Dollar slide. Market players await the release of the January United States Consumer Price Index (CPI). Inflation is foreseen raising at an annualized pace of 6.2%, easing from 6.5% YoY in December. The core reading, excluding volatile food and energy prices, is expected at 5.5%. Although the US Federal Reserve does not base its decision on this particular figure, it has a high impact on financial markets, as it reflects price pressures in the country.

The EUR/USD pair bottomed at 1.0655, bouncing towards the 1.0720 price zone. The pair retains gains in early Asia, despite ignoring early headlines. The European Commission released the quarterly Economic Growth Forecasts report. Economic growth in the Euro Zone has been upwardly revised, now seen at 0.9%. Additionally, inflation forecasts have been downwardly revised to 5.6% for this year and 2.5% in 2024.

The British Pound was among the best performers, advancing vs its American rival to 1.2144, retreating modestly ahead of the close. The UK will publish its latest employment figures on Tuesday.

The AUD/USD pair currently trades at around 0.6960, while USD/CAD is down to the 1.3330 region, with commodity-linked currencies benefiting from the better tone of Wall Street. US indexes pulled back from their intraday highs but anyway ended the day with gains.

Government bond yields seesawed across the day, appreciating during Asian trading hours but shedding some ground at the end of the day amid a better mood. However, the yield on the 2-year Treasury note advanced, while that on the 10-year note finished the day pretty much unchanged.

Spot gold eased and trades at fresh February lows just above $1,850 a troy ounce. Crude oil prices, on the other hand, followed equities with WTI up to $80 a barrel.

Like this article? Help us with some feedback by answering this survey:

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.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD pops to daily highs near 1.1430

EUR/USD starts the week on a positive note, climbing to as high as the 1.1430 zone, or daily tops, on Monday. The pair’s recovery comes in response to the broad-based US Dollar weakness, while investors continue to monitor developments from the Middle East ahead of the beginning of the ECB's annual forum.

Gold remains supported by $4,000

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Bitcoin four-year cycle: BTC risks 75% drawdown with four months of bear market still ahead

Bitcoin price continues to trend downward below the $60,000 support zone after losing over 50% of its value since the $126,199 high in October. Bitcoin’s four-year cycle, measured from cycle tops to bottoms, suggests that four months of a bear market are still ahead.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.