What you should know on Wednesday, February 2:
The dollar remained on the defensive on Tuesday, although losses were limited on the FX board. The EUR/USD pair is ending the day largely unchanged at the 1.1240/50 zone after gloomy data from the EU put a cap on the shared currency.
GBP/USD shrugged off the UK political turmoil and retained gains late in the day, trading around 1.3510. The AUD/USD pair is also holding close to intraday highs in the 0.7110 region despite the RBA refusing to hint at a rate hike sooner. The USD/CAD pair ended the day flat amid the weaker tone in oil prices.
Asian and European indices closed higher, but Wall Street spent the day struggling around its opening level, trading mixed but without direction.
Government bond yields started the day on the right foot, rallying during US trading hours amid generally positive local data. The yield on the US 10-year Treasury note bottomed out at 1.73% and currently stands at 1.80%.
Officials from the US Federal Reserve made statements, giving mixed signals to those who speculated on the dates of rate hikes. Bullard said we would support a hike in March, although he prefers to delay it until May. Earlier in the day, Atlanta’s Bostic noted that there is a “real danger” that expectations will stray from the Fed’s 2% to 4% or more. In general, officials are paving the way to lessen the impact of stock gains.
Gold hovers around the $1,800 level, unable to extend gains. Crude oil prices swung between gains and losses, ending the day marginally lower. WTI is currently trading at $87.90 a barrel.
New Zealand employment figures will bring some action during the Asian session as investors brace for Thursday’s ECB and BOE announcements.
Source: Fx Street
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