In this article, we have covered the highlights of global market news about the AUD/USD, GBP/USD, EUR/USD and USD/INR.
AUD/USD: Modest buy around 0.6750 as USD tracks offbeat yields, US ISM Services PMI watched
While it oscillates around the intraday high of 0.6752 early on Friday in Europe, the AUD/USD seems poised to break a two-week downtrend. In doing so, the Australian pair applauds the US Dollar’s decline amid news about China that encourages taking risks. The cautious atmosphere in advance of the US ISM Services PMI and mixed Australian data, as well as rumors of the Reserve Bank of Australia’s (RBA) policy turn, however, appear to test the optimistic inclination.
The market’s recent confidence seems to benefit the purchasers of the AUD/USD because of discussions about the restarting of the Sino-American trade negotiations. The People’s Bank of China’s expectations for a lax monetary policy might be in the same vein (PBOC). The optimism is however dashed by the US-China conflict at the G20 summit, where the former is pushing for penalties on nations with close links to Russia and who support Moscow in its conflict with Ukraine.
It should be highlighted that the weaker US statistics, mixed Australian data, and stronger China data all provide challenges for the pair traders. Despite this, China’s Caixin Services PMI printed 55.00 numbers for February, compared to 50.0 market expectations and 52.9 prior readings, tracing the most recent activity statistics for the country of the dragon. Australian S&P Global PMI for February was stronger at home, which supported the AUD/USD buyers in maintaining control. However, recent reports on Australia House Loans and Investment Financing for Homes appear to have reached a low point.
GBP/USD Price Analysis: Bulls target the 1.1975 barriers as it bounces off a crucial support line.
Before Friday’s London opening, the GBP/USD currency pair battles to maintain the first daily advances in four around 1.1970. In doing so, the Cable pair rebounds off an early January upward-sloping support line and moves closer to Tuesday’s extended falling trend line resistance.
The GBP/USD price is anticipated to surpass the immediate resistance line, which is near 1.1975 by the time of press, given the quote’s repeated bounces off the identified critical support line, which is about 1.1940 at the time of press.
Nevertheless, the upward potential of the pair is constrained until the Cable pair maintains a lower price than the 200-bar EMA, which is now at 1.2095.
After that, a breach of the 50% Fibonacci retracement level of the pair’s January month upside, which is located at 1.2140, may serve as an additional filter to the north, fast driving the GBP/USD into a horizontal region made up of levels established since January 24, close to 1.2260-70.
The EUR/USD is aiming to trade over 1.0600 amid a weak Dollar Index, but the US Services PMI is expected to rise.
After a rebound move, the EUR/USD pair has risen over the round-level resistance of 1.0600 in the Asian session. Since the US Dollar Index (DXY) is showing a muted performance amid aggressive comments from Federal Reserve (Fed) officials, the major currency pair is seeking to maintain its auction above 1.0600.
The Dollar Index has retested 104.80 as its day low and is vulnerable to further decline. The S&P500 futures have somewhat recovered from the losses seen during the Asian session, indicating a little improvement in investors’ risk appetite. The alpha earned on US government bonds has, in the meanwhile, somewhat declined. The yield on US 10-year Treasury notes has decreased to 6.05%.
The US Institute of Supply Management (ISM) will issue the Services PMI statistics on Friday evening, and the US Dollar is anticipated to react reasonably to this news.
In comparison to the previous release of 55.2, the economic data is now at 54.5. The New Orders Index, which represents future demand, is anticipated to drop from its previous value of 60.4 to 58.5. The Manufacturing New Orders Index PMI was also stronger than expected, which might advance the Consumer Price Index (CPI), thus a surprise increase in the New Orders Index will demonstrate that the total future demand is in an expansionary mode.
USD/INR Price News: The Indian Rupee jumps to a three-week high at 82.20 as yields push the US Dollar.
In response to offers, USD/INR rises from a multi-day low at 82.20 during the early Friday US Dollar decline. As a result, during the five-day downturn, the Indian Rupee (INR) pair falls to its lowest level since February 2009.
As of the time of publication, the US Dollar Index (DXY) is tracking slight decreases in US Treasury note rates at 104.90. Despite this, the 10-year coupons decrease by two basis points to 4.05%, while the two-year equivalent oscillates at 4.89% as of the time of publication. It should be noted that although the two-year counterpart climbed to its best levels since 2007, reaching 4.94% on Thursday, the US 10-year Treasury bond rates reached their highest level since early November 2022.
The recent decline in the rates on US Treasury bonds and the US dollar may be related to new worries about the Federal Reserve’s (Fed) policy change. The cautious optimism in Asia, mostly as a result of the positive China statistics, may also be contributing to the USD/INR depreciation. Yet, the recent uncertainty around the US ISM Services PMI for February seems to be probing the pair sellers.
At home, despite disappointing Gross Domestic Product (GDP) estimates for the fiscal third quarter (Q3) data reported in the previous week, there is optimism for a robust revival of the Indian economy. Also, the USD/INR pair seems to be under downward pressure due to the Central Bank of India’s (RBI) hawkish stance toward its upcoming move.
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