Forex Today: Weak US data hurt the Dollar and boosted risk appetite

Pablo Piovano FXStreet

Extra losses in the Greenback prompted another pullback in the USD Index (DXY), underpinning the appetite for the risk-linked universe amidst renewed speculation of interest rate cuts by the Fed.

Here is what you need to know on Friday, February 16:

The USD Index (DXY) came under extra downside pressure after US Retail Sales contracted more than estimated in January, lending some support to the view of a potential rate cut in May. At the end of the week, the US housing sector and inflation data will take centre stage with the releases of Producer Prices, Housing Starts and Building Permits, all ahead of the advanced Michigan Consumer Sentiment gauge. In addition, the Fed’s Barr and Daly are also due to speak.

EUR/USD extended its bounce off yearly lows and approached the key 1.0800 barrier once again, all amidst a favourable risk-on environment. Absent data releases on February 16, the speech by the ECB’s Schnabel should keep investors entertained.

GBP/USD resumed the uptrend and managed to leave behind the key 200-day SMA (1.2562) and revisit the 1.2600 neighbourhood. Across the Channel, Retail Sales will be the sole data release prior to the speech by BoE’s Pill.

USD/JPY added to the previous session’s decline and receded to the mid-149.00s, where some initial contention seems to have turned up. The Japanese docket includes the weekly Foreign Bond Investment figures and the Tertiary Industry Index on February 16.

AUD/USD remained on track to recover the ground lost after Tuesday’s deep sell-off and advanced further north of 0.6500 the figure, as market participants quickly left behind discouraging prints from the domestic job report.

Prices of WTI regained the smile on the back of the weaker dollar, persistent geopolitical effervescence, and the Fed’s rate cut expectations.

Both Gold and Silver prices edged higher on the back of declining US yields, another negative session of the Greenback as well as the broad-based upbeat tone in the commodity universe.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD remains below 0.7000 amid light trading

AUD/USD fills a modest bearish gap on Monday, but remains below 0.7000 in the Asian session amid holiday-thinned liquidity. The US Dollar attempts a bounce even as US bond yields pull back from multi-year highs, limiting the pair. Moreover, diminishing odds of another RBA rate hike in November cap the Aussie.

USD/JPY hovers above 158.00 amid Japan/ US holiday

USD/JPY extends its range-bound price action into a new week, trading above 158.00 as bulls remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, softer US bond yields keep US Dollar bulls on the back foot and cap the pair's upside. However, geopolitical uncertainties could limit losses for the safe-haven buck amid thin liquidity due to a holiday in Japan and the US.

Gold eases from one-week top, falls below $4,200 as hawkish Fed and Iran risks support USD

Gold attracts some sellers after touching a one-week high earlier this Monday, sliding back below the $4,200 mark during the European session and snapping a two-day winning streak. The US Federal Reserve's hawkish outlook helps limit the downside for the US Dollar, and caps the non-yielding bullion. Meanwhile, crude oil prices fell amid hopes that the Russia-Ukraine energy ceasefire deal will ease global fuel shortages and, in turn, reduce inflationary risks.

Cardano holds above EMAs as recovery builds

Cardano (ADA) reclaims trading above the key support zone on Monday after a 2.85% correction last week. Improving derivatives positioning and constructive technical outlook support a recovery for ADA. Derivatives data shows an improving sentiment among Cardano traders. CoinGlass’ long-to-short ratio for ADA reads 1.01 on Monday, flipping into green territory.

USD/INR: Deep in red below 96.00 as RBI rescues Indian Rupee

After opening significantly higher against the US Dollar (USD) on Monday, the Indian Rupee (INR) clings to recovery gains near 95.80. The pair remains undermined by the Reserve Bank of India’s (RBI) fresh measures to curb US Dollar demand, which has brought relief for the Indian currency.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?