In this article, we have covered the highlights of global market news about the USD/CHF, NZD/USD, AUD/USD and EUR/USD.
USD/CHF bulls hover around 0.9400 as weaker Swiss data challenges inflation worries.
After a gloomy start to March, USD/CHF licks its wounds around 0.9400 as the Swiss currency pair begins to attract bids early on Thursday. In doing so, the quotation defends depressing domestic numbers against stronger US data, high Treasury bond rates, and aggressive Fed comments that may jog the memory of US Dollar bulls.
With that stated, January’s revised down reading of -3.0% for Swiss Real Retail Sales showed a 2.2% YoY decline compared to the 2.2% projected to rise. The February Swiss SVME Purchasing Managers’ Index increased to 48.9 market expectations from 49.3 the month before. The Swiss Gross Domestic Product (GDP), predicted to expand by 0.3% and 0.2% in the third and fourth quarters of 2022, decreased to 0% in Q4 of that year.
The US ISM Manufacturing PMI data, on the other hand, has reignited concerns about inflation. While the headline index increased to 47.7 from 47.4 before and 48.0 was forecast, the readings for prices paid and new orders were the highest in five and four months, respectively.
NZD/USD Price Analysis: A breach of 0.6270 is necessary for further gains
NZD/USD bulls find it challenging to defend the breaking out of the falling wedge as the primary moving averages test the upside at the mid-0.6200s on early Thursday. Nonetheless, the approaching bull cross on the MACD indicator gives purchasers of the Kiwi pair reason for optimism, particularly in light of the previous day’s confirmation of the bullish chart pattern.
At the time of publication, the upward break of a one-month-old falling wedge bullish formation failed to pass the convergence of the 200-day EMA and the 21-day EMA, which was around 0.6270.
If the exchange rate clears the immediate barrier as predicted by the MACD conditions and falling wedge confirmation, the NZD/USD may swiftly approach the 0.6390-area swing high from mid-February.
The highs reached in December and the preceding month, respectively, at 0.6515 and 0.6540, might serve as stopgaps throughout the hypothetical run-up aiming for 0.6600 if Kiwi buyers maintain control beyond 0.6390 and pass the 0.6400 level.
The AUD/USD pair grins at 0.6700 as high Treasury note yields test US Dollar weakness.
While traders wait for more signs to support the most recent recovery from a two-month low on early Thursday morning in Asia, the AUD/USD pair is still stagnant around 0.6755. In doing so, the Australian pair finds it challenging to defend the weaker US Dollar and market optimism connected to China in the face of high US Treasury bond rates and generally positive US statistics.
Nevertheless, after robust Chinese activity statistics for February, the Australian pair overcame the pessimism caused by Australia’s GDP and inflation. The statements made by China’s Finance Minister Liu He, who has shown his willingness to increase the country’s fiscal expenditure, were also helpful to the risk barometer pair. The policymaker also criticized the AUD/USD bulls by saying that the basis of China’s economic recovery is fragile.
The headline US ISM Manufacturing PMI climbed to 47.7 from 47.4 before, vs. the 48.0 forecasts, reigniting inflation concerns. However, new orders and prices paid were at their highest points in five and four months, respectively.
EUR/USD aims for 1.0700 as the ECB predicts no rate cuts in the face of increasing German inflation.
After failing to retake the round-level resistance of 1.0700 in the late New York session, the EUR/USD pair has since moved sideways. The leading currency pair is anticipated to retake the barrier noted above as the risk-off sentiment has subsided as expectations of a Chinese revival after the publication of the Caixin Manufacturing PMI eclipsed the possibility of a global recession.
The S&P 500 saw modest losses on Wednesday as Federal Reserve (Fed) members gave aggressive interest rate outlook. The US Dollar Index (DXY) has dropped to just around 104.00 after failing to rise over 104.20, reflecting a mixed market sentiment. The 10-year US Treasury rates increased to 4% due to the continued lackluster demand for US government assets.
Raphael Bostic, president of the Atlanta Fed, predicted that since the US Consumer Price Index (CPI) is so sticky, the central bank will raise the terminal rate between 5.00% and 5.25%. In addition, the Fed policymaker anticipates that the central bank will maintain the increased terminal rate steady until 2024.