Forex Today – Asian Session: Unimpressive BOE and ECB Boost US Dollar

Things to watch out for on Friday, February 3:

The US dollar recovered most of the ground lost after the Fed’s decision, amid ECB and BOE monetary policy announcements. The US currency rose against most major currencies, with the yen being the strongest rival and the pound the weakest.

Earlier, the lieutenant governor of the Bank of Japan President Mazasumi Wakatabe said there has been no change in the central bank’s determination to continue its current monetary policy. The USD/JPY pair ended the day around 128.60 after extending its weekly decline to 128.07.

The Bank of England was the first to intervene and, as expected, Bailey and company raised rates 0.5% to 4%. Governor Bailey was quite optimistic, as he stated that a possible recession will probably be shallower than previously expected. He also said that they would have to keep a close eye on inflation developments. GBP/USD ended up falling to a multi-week low of 1.2330.

The Bank Central Europe also rose 50 basis points and even confirmed another 50 basis points for March. However, President Lagarde said that the following decisions will be made on a meeting-by-meeting basis and will depend on the data. The EUR/USD pair is trading just above the 1.0900 threshold as investors believe terminal rates are just around the corner.

The Stock Markets advanced, partially limiting the gains of the Dollar. US Treasury yields dipped from post-Fed highs and ended the day lower.

Spot gold plunged from the $1,950 zone and ended the day around $1,913 a troy ounce. Crude Oil prices lost some ground, but the losses were moderated by the better tone of the US indices. WTI is currently changing hands at $75.80 a barrel.

The week will conclude with the release of US data for non-farm payrollsReport on Friday.