Gold shines as dollar retreats and Bitcoin falls awaiting critical speech from Powell

This is what you need to know to trade today Tuesday, February 23:

The market mood has improved after another day down in stocks as US yields have drifted away from the highs. Fear of inflation drives commodities and related currencies, while Bitcoin plunges into swinging trade. All eyes are on the testimony of Fed Chairman Jerome Powell.

After US stocks fell again, the S&P 500 futures are rising and benchmark ten-year bond yields are below their 1.40% high. The US Dollar is on the defensive with GBP / USD targeting 1.41 and EUR / USD moving above 1.2150.

The Commodity-related currencies experience more substantial movements, with AUD / USD topping 0.79, NZD / USD above 0.73, and USD / CAD falling below 1.26. The loonie is benefiting from a further rise in oil prices, with WTI changing hands above $ 62 despite a recovery in US oil production, following the major snow and ice storm. that has devastated part of the country.

Jerome Powell, Chairman of the Federal Reserve, will testify before Congress amid a dilemma – while higher bond yields represent “reflation trading” and a return to growth, there is also the risk of overheating, as already expressed in the prices of raw materials. Powell will try to navigate between causing fear by inducing removal of the stimulus too quickly and doing too much.

Christine LagardeThe President of the European Central Bank said she “closely follows the evolution of longer-term nominal bond yields,” indicating that the Frankfurt-based institution is ready to step in and reduce debt yields.

The gold is rising, with XAU / USD regaining the $ 1,800 level. A weaker dollar and demand in India are propping up the price of the precious metal.

The Bitcoin fell about $ 10,000 on Monday to well below $ 50,000, but recovered quickly. A significant sell-off was blamed for the drop, and BTC / USD has since rallied to around the 50,000 mark.

Coronavirus: More than 500,000 people have died in the US from COVID-19. The world’s richest nation has passed this grim milestone amid falling cases and hospitalizations and the launch of vaccines. A new study in the UK has shown that a single dose of Pfizer / BioNTech provides sufficient protection against infection.

The British Prime Minister, Boris Johnson, presented his reopening plan, which is considerably cautious: a five-week gap between each stage. The goal is to avoid another confinement, making this relaxation irreversible. Britain’s unemployment rate rose to 5% in January, as expected, while wage growth accelerated to 4.7% and January jobless claims fell by 20,000, both better than estimates.