Forex Today: Dollar Struggles to Find Demand as Mood Improves

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This is what you need to know to trade today friday march 17:

As market sentiment continues to improve on concerns about the deepening financial crisis easing, the US dollar is having a hard time staying resilient against its main rivals. Eurostat will publish the inflation data for February (revision) in the European session. Later, the University of Michigan survey of consumer sentiment for March and the US Federal Reserve (Fed) data on industrial production for February will provide support.

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As expected, the European Central Bank (ECB) raised its benchmark rates by 50 basis points (bp) after its March monetary policy meeting. Although ECB President Christine Lagarde refrained from committing to further large rate hikes in the near future, she reassured markets that the Eurozone banking sector was in good shape.

ECB analysis: Lagarde gives a sign of confidence to banks and the Euro prepares to resume the upward path

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Meanwhile, the Fed announced late Thursday that 11 banks deposited $30 billion with First Republic Bank to help it solve its liquidity problems. Wall Street’s major indices gained momentum on this news and posted decisive daily gains. Following Wednesday’s sharp drop, the benchmark 10-year US Treasury yield rose more than 3%.

As of early Friday, US stock index futures are holding on to modest daily gains and the Dollar Index remains in negative territory slightly below 104.00, while the 10-year US Treasury yield fluctuates by above 3.5%.

He EUR/USD it fluctuated during the ECB event on Thursday, but managed to hold its own in the American session. The pair maintains its recovery momentum early Friday and is trading above 1.0650.

He GBP/USD posted gains on Thursday and continued to rise early on Friday. Supported by the renewed weakness of the dollar, the pair trades above 1.2150 in the European morning.

Following Thursday’s indecisive action, the USD/JPY came under modest bearish pressure and pulled back towards 133.00 on Friday. Bank of Japan Governor Haruhiko Kuroda said on Friday that it would be possible to further lower interest rates in the short term, but added that he could not comment to what extent. During Asian trading hours, the Nikkei Asian Review reported that the Japanese government, the Bank of Japan and the Financial Services Authority (FSA) will meet this afternoon to assess the situation in the financial markets in Japan.

The Reserve Bank of New Zealand (RBNZ) said in a statement early on Friday that all New Zealand banks are currently operating above their minimum regulatory requirements. The pair NZD/USD gained bullish momentum on this headline and advanced towards 0.6250.

The price of Gold closed virtually unchanged on Thursday as rising US Treasury yields prevented XAU/USD from taking advantage of renewed dollar weakness. However, the pair appears to have turned north early on Friday, trading near $1,930.

He Bitcoin It benefits from the risk-friendly market environment and is trading around $26,000 early Friday, up almost 4% on the day. After Thursday’s rebound, the ethereum continues to rise and trades above $1,700 during the European morning.

Source: Fx Street

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