In this article, we have covered the highlights of global market news about the USD/CHF, EUR/USD, GBP/USD, AUD/USD and USD/MXN.

USD/CHF falls four days below 0.9200 ahead of US PMI, Durable Goods Orders.

As it continues its four-day losing run early on Friday ahead of the important US data, the USD/CHF retests its intraday low at 0.9160. So, notwithstanding a slow close to the tumultuous week, the Swiss Franc (CHF) pair validates bullish bias around the Swiss National Bank (SNB) vs. dovish predictions on the Federal Reserve’s (Fed) future move.

As generally anticipated, the SNB increased its benchmark sight deposit interest rate on Thursday from 1.0% to 1.50%. The markets anticipate the last rate increase in June when the SNB hikes rates for the fourth consecutive meeting.

Thomas Jordan, the chairman of the SNB, said that more rate increases could not be ruled out to maintain price stability after the interest rate announcements. The decision-maker said it would have been reckless to take a chance on a Credit Suisse bankruptcy while stating, “Measures taken by the federal government, FINMA, and SNB have put a stop to the crisis.”

Andrea Maechler, a member of the SNB governing board, also spoke on Thursday and said that the collapse of Silicon Valley Bank has “markedly exacerbated tension on the financial markets.”

In other places, the Fed’s aggressive lending throughout the financial crisis raises concerns about an expanding Fed balance sheet, which in turn prompts new demands from hawks for the US central bank to take action. However, the conflicting US statistics and the most recent Fed announcement put the policy hawks on the defensive.

EUR/USD bears struggle at 1.0830 amid PMIs and financial instability.

Early on Friday, the EUR/USD showed lethargic markets, maintaining a defensive position between 1.0830–20 after reversing from a seven-week high the day before and recording slight losses recently.

It’s important to note that the Euro-dollar pair reversed from its multi-day high on Thursday as Treasury bond rates halted further declines and US data were primarily positive. The quote’s failure to pass a significant horizontal barrier around about 1.0930–35 strengthened the pullback movements. Nevertheless, it should be highlighted that recent hawkish remarks from an official of the European Central Bank (ECB) and conflicting worries about the US Federal Reserve’s (Fed) following action have tested bearish.

Yet, concerns about the Fed’s expanding balance sheet revive hawkish demands for the US central banks, and the upheaval in the global financial system adds to the pressure, causing the US dollar to lick its wounds close to a seven-week low. However, the mixed US statistics and the Fed’s remarks enabled significant market participants like DoubleLine’s Gundlach and Goldman Sachs to reassert their support for the US central banks’ dovish policies.

On the other hand, Madis Muller, a member of the Governing Council of the European Central Bank (ECB), said that inflation is a larger issue than the increase in borrowing prices. The decision-maker also said that the ECB should probably boost interest rates. Also, ECB policymaker Klaas Knot said that the bank is unlikely to stop raising interest rates and that he still believes that the policy rate has to be raised in May.

GBP/USD bears reach 1.2250 amid volatile markets before important UK/US economics.

GBP/USD pares weekly gains at a nearly two-month high as bulls lose momentum in the face of conflicting risk drivers and trepidation ahead of Friday’s important UK/US data. As a result, the Cable pair retreats from a seven-week high and records its first daily loss in three days, falling 0.16% intraday as it teeters on the daily low at 1.2260.

Although dovish monetary policy from the US Federal Reserve (Fed) and low rates earlier drove Cable purchases, recent worries over banking sector disruption and predictions for a lengthier period of tighter monetary policy from the Fed have baited the GBP/USD selling. Yet, it should be mentioned that while purchasers of the pair wait for important information, the negative US Treasury bond rates and conflicting US data give them optimism.

The US Dollar can lick its wounds close to a seven-week low as concerns about a growing Fed balance sheet revive hawkish demands for the US central banks and add to the global financial instability. Nonetheless, while recovering from a seven-week low the previous day, the US Dollar Index (DXY) remains bearish around 102.60 as of press time, while the yields on US 10-year and two-year Treasury bonds are still low at 3.39% and 3.80%, respectively. The S&P 500 Futures struggle to replicate Wall Street’s positive actions while conveying the atmosphere.

AUD/USD falls below 0.6700 on gloomy news. Australian PMI joins financial anxiety and Fed worries.

While preparing for the weekly loss early on Friday, AUD/USD records its first daily loss in three days at 0.6670. The Australian couple, therefore, defends their risk barometer status as well as the negative activity figures at home.

Preliminary March S&P Global PMI readings for Australia fell below market expectations and earlier readings earlier in the day, into the contraction zone of sub 50.00. On the other hand, the Services PMI fell to 48.2 from 50.7 previous readings and 49.7 market estimates, while the Manufacturing indicator fell to 48.7 from 50.3 projected and 50.7 previously. As a result, the Composite PMI decreased from 50.6 to 48.1.

In other news, concerns about the Fed’s swelling balance sheet prompt more hawkish demands for the US central banks, and the upheaval in the global financial system adds to the pressure, causing the US dollar to lick its wounds close to a seven-week low. Nonetheless, while recovering from a seven-week low the previous day, the US Dollar Index (DXY) remains bearish around 102.60 as of press time, while the yields on US 10-year and two-year Treasury bonds are still low at 3.39% and 3.80%, respectively. The S&P 500 Futures struggle to replicate Wall Street’s positive actions while conveying the atmosphere.

USD/MXN oscillates about mid-18.00s before US PMI and Durable Goods Orders.

After a drop from the intraday peak during a slow session, USD/MXN remains defensive between 18.58-59 early on Friday. Yet, despite the recent recovery in the dollar, the Mexican Peso pair remains well-positioned for the first weekly loss in three against the broad US Dollar.

It’s important to note that the worries over the Fed’s expanding balance sheet revive hawkish demands for the US central banks and add to the turbulence in the world’s financial system, dampening sentiment and enabling the US Dollar to lick its wounds close to its seven-week low. Nonetheless, while recovering from a seven-week low the previous day, the US Dollar Index (DXY) remains bearish around 102.60 as of press time, while the yields on US 10-year and two-year Treasury bonds are still low at 3.39% and 3.80%, respectively.

In addition to the Fed’s wagers, remarks from the Basel Committee on Banking Supervision Chair and US Treasury Secretary Janet Yellen influenced the market’s attitude and tested the USD/MXN bears.

Please click here for the Forex News Updates from 23 March, 2023.