Forex Today: Tension mounts ahead of US inflation data

What you need to know on Wednesday, February 9:

Major pairs continued lacking certain directional strength and held within limited intraday ranges on Tuesday. The greenback found some strength in soaring government bond yields, as that on the US 10-year Treasury note reached 1.97%. However, yields’ strength was barely enough to prevent the dollar from plummeting.

The EUR/USD pair briefly pierced the 1.1400 level but ended the day in the 1.1410 price zone. Comments from the European Central Bank member Francois Villeroy put some pressure on the shared currency by the end of the day, as he noted that the market may have overreacted to President Christine Lagarde’s words last week.

UK Prime Minister Boris Johnson reshuffled its cabinet. Jacob Rees-Mogg has become the new Brexit Minister, while Mark Spencer replaced him as leader of the Commons. Chris Heaton-Harris becomes the new chief whip, while Paymaster General Michael Ellis would take on the additional role of minister for the Cabinet Office. The decision comes in the middle of the lockdown parties’ scandal, which menaces Johnson’s leadership. GBP/USD trades around 1.3550.

The AUD/USD pair is up for a second consecutive day trading in the 0.7140 region. The USD/CAD pair edged higher and currently hovers around 1.2700, as lower oil prices undermined demand for the Canadian dollar. The greenback posted modest gains against safe-haven CHF and JPY.

Gold surged to a fresh two-week high of $1,828.36 a troy ounce, holding nearby at the end of the day. Meanwhile, WTI trades at $89.80 a barrel.

Market players keep waiting for January US inflation figures to be out on Thursday.

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