Forex Today: Stimulus optimism, coronavirus concerns

FXStreet Team FXStreet

What you need to know on Tuesday, March 2:

Upbeat US data and the better performance of equities pushed the greenback higher against its European rivals and lower against commodity-linked ones. The EUR/USD pair trades sub-1.2100 while GBP/USD was rejected from near 1.4000. The Australian and Canadian dollars advanced, despite commodities' prices edged lower.

Gold prices resumed their declines after a failed attempt to regain the upside, with spot ending the day at $1,720.00 a troy ounce. WTI fell to $60.00 a barrel

The USD/JPY pair nears 107.00 amid combined dollar’s demand and higher equities. US Treasury yields, in the meantime, had a quiet day, hovering around Friday’s closing levels.

Wall Street advanced after the US House of Representatives passed US President Joe Biden’s stimulus bill. Democrats hope to have it finished by March 14, when the current stimulus expires.

Coronavirus: the number of global new contagions increased last week for the first time in almost two months. Meanwhile, experts suspect the Brazilian strain could evade natural immunity, rising all the alarms. The world continues vaccine immunization at an uneven pace.

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EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.