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Forex Today – Asian Session: DXY Rallies Despite Risk Appetite; focus is on inflation data

The currency market does not offer clear signals awaiting the crucial inflation data from the euro zone and the United States. The dollar alternates between gains and losses despite the appetite for risk. The economic calendar for the Asian session is thin and could favor further price consolidation.

Here’s what to know on Thursday, March 30:

Wall Street indices closed with strong gains and the VIX posted its lowest close in three weeks. The S&P 500 recovered the 4,000 point mark with a 1.40% rise, while the Nasdaq soared 1.79%. The technology and banking sectors rose as banking concerns continued to subside. Investors turn their attention to upcoming inflation data.

US Treasury yields moved sideways in a quiet session, with yields hovering around recent highs. The Japanese yen was the worst performing currency, affected by risk appetite, rising yields and expectations that the Bank of Japan will maintain its current policy until the second half of the year. USD/JPY last approached 133.00, after a 200-point recovery.

The USD/JPY recovery boosted the DXY, which rose after two days, ending above 102.50. Turning to US data, jobless claims and Thursday’s third estimate of Q4 GDP growth will be the lead up to Friday’s critical PCE inflation report.

EUR/USD hit weekly highs and pulled back; it is consolidating around 1.0840. German inflation will be released on Thursday and Eurozone inflation on Friday. Those responsible for the European Central Bank (ECB) will closely monitor these figures, which could have important repercussions on the markets.

GBP/USD reached its highest level in two months above 1.2350, but reversed and fell towards 1.2300. The euro and the pound hold significant holdings against the US dollar.

The optimism in the stock markets did not reflect the usual correlation between commodity currencies. The Loonie continues to outperform while the AUD and NZD weaken. USD/CAD fell sharply for the third day in a row and posted its lowest daily close in a month at 1.3560.

The lower-than-expected Australian CPI data for February (6.8% yoy vs. 7.1%) supported the view that the Reserve Bank of Australia (RBA) will pause its meeting next week. The AUD/USD pair fell after the report, bottomed in European time at 0.6659 and then pared losses.

The Kiwi it was the worst among commodity currencies. He NZD/USD peaked at 0.6270 and then fell towards 0.6200, while AUD/NZD rebounded strongly from three-day lows below 1.0700 to weekly highs at 1.0747, despite lower Australian inflation.

Emerging market currencies encouraged Wall Street’s bullish tone. USD/MXN points towards 18.00 after falling for the fifth day in a row, hitting a three-week low. On Thursday, Banxico will announce its monetary policy decision.

Gold It pulled back, finding support around the $1,960 zone, while silver ended up sideways at $23.30. Major cryptocurrencies rallied on Wednesday. Bitcoin he earned more than $1,000, or 4%, to earn back the $28,000. XRP was up 4.45%.

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Source: Fx Street

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