Forex Today: The dollar stabilizes after the inflation data from the Fed

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This is what you need to know to trade today Wednesday March 15:

The US dollar managed to shake off the selling pressure on Tuesday after US inflation data dropped. will revive expectations of a 25 basis point Fed rate hike in March and fuel a rebound in US Treasury yields. Markets remain calm early on Wednesday as attention turns to February US Retail Sales and Producer Price Index data. In the early hours of the Asian session, investors will be closely watching New Zealand’s Q4 Gross Domestic Product figures.

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The US Bureau of Labor Statistics reported Tuesday that the annual Consumer Price Index fell from 6.4% forecast to 6% in February. More importantly, the core CPI rose 0.5% m/m, following 0.4% growth in January. This figure slightly exceeded market expectations, which had expected 0.4%. In turn, US Treasury bond yields gained traction and the 10-year benchmark rose more than 3% on a daily basis. According to CME Group’s FedWatch tool, markets currently price the probability of a 25 basis point rate hike at the next meeting at 82%.

Meanwhile, the new Bank Term Financing Program (BTFP), introduced by the Fed in response to the failure of Silicon Valley Bank and Signature Bank, appears to have helped calm markets. On Tuesday, the three main Wall Street indexes closed with strong gains.

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During the Asian session, data from China revealed that retail sales grew 3.5% annually in February, in line with the market consensus. In the same period, industrial production grew by 2.4%, compared to the 2.7% estimated by analysts.

He EUR/USD continued higher on Tuesday but seems to have lost its bullish momentum after hitting a fresh multi-week high at 1.0760. During the European morning, the pair is trading below 1.0750.

After the impressive recovery on Monday, the GBP/USD closed slightly lower on Tuesday. The pair manages to stay above 1.2150 early on Wednesday.

He NZD/USD it came under modest bearish pressure and pulled back towards 0.6200 during Asian trading hours on Wednesday. Data from New Zealand revealed that the current account to GDP ratio was -8.9% in the fourth quarter, compared with -7.9% in the third quarter. Citing a comment by Anthony Walker, head of sovereign ratings for Australia, New Zealand and the Pacific at S&P, Bloomberg reported that New Zealand’s credit ratings with S&P Global Ratings could come under pressure if the country’s current account deficit remains too large. big. In quarterly terms, the country’s real Gross Domestic Product is expected to contract by 0.2% in the fourth quarter.

He AUD/USD it fluctuates slightly below 0.6700 on Wednesday. In the Asian session, data from the February jobs report and March inflation expectations from Australia will provide support. In addition, the Reserve Bank of Australia (RBA) will publish its Quarterly Bulletin.

Minutes from the Bank of Japan’s January meeting revealed on Wednesday that bank members shared the view that rising underlying inflation was likely to lead to sustained price rises supported by wage increases. After the rebound on Tuesday, the USD/JPY continues to rise and is now trading above 134.60.

Pressured by rising US bond yields, XAU/USD snapped a three-day winning streak on Tuesday. The price of Gold It last traded in a tight range around $1,900.

He Bitcoin it fell back below $25,000 early Wednesday, after rallying to its highest level since June above $26,500 on Tuesday. ethereum it also hit all-time highs near $1,800 before pulling back towards $1,700.

Source: Fx Street

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