Forex Today: The Dollar says hello as Wall Street’s rally fades

Here is what you need to know on Friday, March 24:

After the meetings of the Federal Reserve (Fed), the Swiss National Bank (SNB) and the Bank of England (BoE), the focus is back on economic data on Friday, with the preliminary reading of March PMIs across the globe. Traders will also pay attention to renewed banking concerns. 

Equity prices in Wall Street finished with gains but far from session highs, pointing lower amid renewed banking concerns. The Dow Jones gained 75 points after being up by more than 400 points. Technology stocks outperformed while regional banks tumbled. 

On Friday, markets will have the first numbers of global activity during March, the PMIs. Central banks around the globe adopted the “data-dependent” mantra, so economic figures should be relevant. Overall, activity is expected to have remained near February’s levels. 

Data released on Thursday showed US New Home Sales rose 1.1% to 640,000 (annual rate) in February, slightly below expectations. The Chicago Fed National Activity Index fell from 0.23 to -0.19 in March, against forecasts of a 0 reading. Initial Jobless Claims dropped unexpectedly in the week ended March 18 to 191,000, the lowest in three weeks. 

Late on the day, the deterioration in market sentiment boosted Treasury Bonds. The US 10-year yield settled at 3.39%, the lowest in three days. Despite the moves in the bond market, the US Dollar Index rebounded, ending with marginal gains above 102.50. 

USD/JPY staged a short-lived recovery to 131.60 after US employment data and then fell to 130.32, a one-month low. The Japanese Yen was the main winner of the American session on the back of lower yields. Inflation data will be released early in Japan. 

EUR/USD failed again to hold above 1.0900 and retreated sharply from monthly highs to below 1.0850. GBP/USD also pulled back, sliding under 1.2300. The Bank of England, as expected, raised its key interest rate by 25 basis points to 4.25%. The Monetary Policy Committee voted by a majority of 7-2 for the hike (Dhingra and Tenreyro voted to keep the rate at 4%). UK February Retail Sales are due on Friday. 

AUD/USD battled again with the 0.6730/50 level, and retreated, falling under 0.6700 amid a stronger Greenback. The Australian PMI is due on Friday. NZD/USD was also affected by USD’s recovery and dropped from near 0.6300 to 0.6250. The Kiwi was among the top performers on Thursday. USD/CAD bounced from weekly lows at 1.3620 back above 1.3700. Canada will report January Retail Sales on Friday. 

Gold rose again and traded above $2,000, while Silver rose past $23.00. Bitcoin recovered from Wednesday’s slide, rising to $28,500. Crude oil prices dropped more than 1% after spending most of the day in positive ground. 

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