Forex Today: The dollar remains on the backfoot

Valeria Bednarik FXStreet

What you need to know on Wednesday, February 2:

The greenback remained on the backfoot on Tuesday, although losses were limited across the FX board. The EUR/USD pair is ending the day pretty much unchanged in the 1.1240/50 area after dismal EU data put a cap to the shared currency.

GBP/USD shrugged off UK's political turmoil and retained gains at the end of the day, trading at around 1.3510. The AUD/USD pair also holds near intraday highs in the 0.7110 region despite the RBA refusing to hint at a sooner rate hike. The USD/CAD pair ended the day unchanged amid the weaker tone of oil prices.

Asian and European indexes got to close with gains, but Wall Street spent the day struggling around its opening level, trading mixed but directionless.

Government bond yields started the day on the backfoot, recovering during US trading hours amid generally positive local data. The yield on the 10-year US Treasury note bottomed at 1.73% and currently stands at 1.80%.

US Federal Reserve officials were on the wires, giving mixed signals to those speculating on rate hikes' dates. Bullard said that we would support a hike in March, although he prefers to delay it to May. Earlier in the day, Atlanta's Bostic noted that there is a "real danger" of expectations drifting from the Fed's 2% to 4% or higher. Overall, officials are paving the way to lessen the impact of hikes in stocks.

Gold is hovering around the $1,800 level, incapable of extending gains. Crude oil prices seesawed between gains and losses, ending the day marginally lower. WTI currently trades at $87.90 a barrel.

New Zealand employment figures will bring some action during the Asian session as investors get ready for Thursday's ECB and BOE announcements.

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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 extends the drop to 1.3360

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