In this article, we have covered the highlights of global market news about the AUD/USD, USD/CHF, USD/JPY and USD/CAD.
The AUD/USD encounters resistance around 0.6660 amid varied reactions to the US financial system.
After a steady rebound to close to 0.6660 in the early European session, the AUD/USD has come under intense assault. The Australian asset has seen significant bids amid the US Dollar Index’s rebound movement (DXY). Before Wednesday’s anticipated publication of the monthly Consumer Price Index (CPI), the Australian Dollar is expected to stay active.
On Monday morning, S&P500 futures soared higher on expectations that liquidity support for tiny US banks will increase. The 500-US stocks futures basket has maintained its positive leaning from Friday, reflecting a considerable increase in market participants’ risk appetite.
The US Dollar Index (DXY) is defending the 103.00 support on the belief that positive preliminary S&P Global PMI data may dim prospects of the Federal Reserve completing its rate-hiking cycle (Fed). Manufacturing PMI increased to 49.3 from the previous reading of 47.3 and the consensus of 47.0. At the same time, Services PMI increased to 53.8 from forecasts of 50.5 and 50.6 in the previous report.
USD/CHF is tracking bearish options market indications below 0.9200.
As markets become lethargic ahead of Monday’s European session, the USD/CHF pares its losses to about 0.9185 but remains under pressure. So, the Swiss currency pair (CHF) reflects the traders’ apprehension in the lead-up to the important Swiss National Bank’s (SNB) quarterly Bulletin and the Fed’s favored inflation indicator, the Core Personal Consumption Expenditure (PCE) Price Index.
But, by the close of Friday’s North American session, the USD/CHF pair’s one-month risk reversal (RR), a measure of the spread between call and put options had posted a three-day losing streak. It’s important to note that the daily RR decreased as recently as -0.010.
The weekly RR, which printed 0.000 numbers the week before, plummeted to -0.040, which pleased the pair sellers daily.
Because of this, the USD/CHF pair’s present weakness is still legitimate even if the markets continue to be unsteady before important data or events.
USD/JPY is in a four-day slump at 130.50, with all eyes on Japan/US inflation data.
Even if markets are quiet early on Monday, USD/JPY appeases bears for the fourth straight day.
The recent weakening in the Yen pair may be attributed to traders’ rush to the Japanese Yen (JPY) in pursuit of risk protection and impending concerns about the US and European banking sectors. The recent divergence between the market’s perception of the Federal Reserve’s (Fed) and the Bank of Japan’s (BoJ) upcoming actions seems to be impacting the quotation lately.
IMF Head Kristalina Georgieva cautioned that “risks to financial stability have escalated,” despite Bloomberg’s inspirational headlines indicating that US and European governments are up for managing the bank fallouts. The report that suggested that Russia was moving its nuclear weapons close to Belarus further increased market apprehension.
Neel Kashkari, the president of the Minneapolis Fed, signaled worries about a US recession and restrained demands for the US central bank to raise interest rates, which put downward pressure on the USD/Yen exchange rate.
USD/CAD declines to close to 1.3710 as expectations of a BoC policy tightening restart grow.
In the Asian session, the USD/CAD pair set a new day low of 1.3725. After the publication of Canadian solid Retail Sales data, the US Dollar Index’s (DXY) muted performance and growing expectations for a return to policy tightening by the Bank of Canada (BoC) support the downward movement in the Loonie asset.
S&P500 futures have made significant gains throughout the Asian session as market players have become more confident as US officials explore increasing the emergency lending program. The US Dollar Index (DXY) needs to gain momentum as the market anticipates the Federal Reserve’s policy-tightening cycle to end (Fed). The Dollar Index is holding onto the 103.00 support, although a fall seems more likely.
Predictions for pausing the Fed’s rate-hiking cycle are intensifying as American banks’ loan standards tighten due to the unrest. Banks are taking greater security measures while distributing advances. Financial institutions have suffered dramatically due to a bloody battle against persistent inflation.
Positive Retail Sales (Feb) numbers have increased the likelihood that the Bank of Canada will resume its policy-tightening drive, which is good news for the Canadian Dollar (BoC). The BoC stopped raising rates at the beginning of the year because it believed the present monetary policy was restrictive enough to keep inflation under control.
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