This is what you need to know to trade today tuesday march 22:
The dollar continues to outperform its rivals after starting the new week at a strong pace. As a result of rising US Treasury yields, the US Dollar Index is moving towards 99.00 this Tuesday. The economic calendar will not include any high-level macro data releases. Market participants will closely monitor the speeches of the members of the central banks and the developments surrounding the conflict between Russia and Ukraine.
In a statement published on Monday, the Kremin noted that there had been no significant progress in the peace talks with Ukraine and warned that an EU embargo on Russian oil “would hit the whole world”. Similarly, Ukrainian President Volodymyr Zelenskyy said that it was not possible to make a decision on what should be done with the occupied territories in Ukraine. Heading into the European session, US stock index futures are posting small daily losses.
Meanwhile, the Yield on 10-year US Treasuries hit highest level since May 2019 above 2.3% following statements by Fed officials. FOMC Chairman Jerome Powell reiterated that policy could become “tight” if necessary to restore price stability. Atlanta Fed President Raphael Bostic has signaled he expects six rate hikes in 2022 and Richmond Fed President Thomas Barkin has argued it might be appropriate to raise the policy rate by 50 basis points to tame the inflation.
The EUR/USD is having a hard time gaining traction after falling below 1.1000 in the early hours of Tuesday. Christine Lagarde, president of the European Central Bank, said on Monday that her policy will not be in step with the Fed’s policy. Lagarde is scheduled to speak again today at 13:15 GMT.
The GBP/USD continues to slide towards 1.3100 pressured by the general strength of the dollar. Later in the day, Bank of England (BOE) Deputy Governor Jon Cunliffe, who voted to leave the policy rate unchanged last week, will deliver a speech at 15:15 GMT.
The risk-averse market environment is allowing the gold find demand, but rising US Treasury yields cap the yellow metal’s upside. Therefore, XAU/USD is trading in a relatively tight range below $1,950.
Driven by rising US bond yields, the USD/JPY it extended its rally and was last seen trading at its highest level since January 2016 near 120.50. Japan’s Chief Cabinet Secretary Hirokazu Matsuno said earlier in the day that they were not thinking about an economic stimulus package at the moment.
The Bitcoin it dipped to $40,000 on Monday, but managed to gain momentum. After advancing to its strongest level in over two weeks at $43,390 earlier in the day, BTC/USD erased a portion of its gains and was last seen up 3% on the day at $42,250. The ethereum rose above $3,000 for the first time since early March on Tuesday before entering a consolidation phase near that level.
Source: Fx Street
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