In this article, we have covered the highlights of global market news about the USD/TRY, GBP/USD, USD/INR and EUR/USD.
USD/TRY falls to $18.80 amid lethargic markets ahead of the FOMC Minutes, according to CBRT.
As the US Dollar weakens ahead of the important Federal Open Market Committee (FOMC) Monetary Policy Meeting Minutes, USD/TRY declines to $18.81, retreating from the record high reached the previous day. The traders’ cautious attitude toward the Turkish Lira (TRY) ahead of Thursday’s Central Bank of the Republic of Türkiye (CBRT) Interest Rate Decision could strengthen the retreat actions.
The recent concern for the countries seems to be the earthquakes in Turkey and Syria. The CBRT’s most recent silence about the 9.0% interest rate is justified by the fact that Turkish inflation has decreased over the last two months.
On the other hand, the US Dollar Index’s first daily positive performance in three days the day before, down 0.07% intraday around 104.11 at last, was supported by solid preliminary US S&P Global PMIs for February and the hawkish Fed wagers.
The USD/TRY gain is driven by the Fed-CBRT monetary policy divergence. Further statements from US Secretary of State Antony Blinken and Russian President Vladimir Putin affect the market’s mood and tease USD/TRY bulls since they imply that tensions between Moscow and Kyiv will continue to rise, with recent indirect involvement from the West and China. But, a lack of meaningful information from Asia has stopped the risk-off attitude.
GBP/USD holds over 1.2100 as risk-on impulse recovers and FOMC minutes are being considered.
In the Asian session, the GBP/USD pair is constructing the auction platform above the round-level support of 1.2100. Cable is gaining traction as market players’ willingness to take risks steadily increases.
After a sharp sell-off on Tuesday, S&P500 futures have steadily recovered, displaying some confidence despite the market’s generally gloomy outlook. It is difficult for the US Dollar Index (DXY) to continue rising over 103.80. Moreover, the yield on US 10-year Treasury notes has dipped just below 3.94%.
Immediately after the Federal Open Market Committee (FOMC) minutes publication, investors should prepare for a spike in volatility. A thorough justification for the 25 basis point (bps) interest rate increase in the first week of February will be made available with the publication of the FOMC minutes. The market players will pay close attention to the advice on interest rates in this context.
According to Bloomberg, two hawkish policymakers, Loretta Mester of the Cleveland Federal Reserve and James Bullard of the St. Louis Federal Reserve, said last week that they saw a case for implementing a second 50-basis-point hike at the meeting and that much more significant moves should still be on the table for upcoming decisions. However, raising rates by 50 basis points would lift the gloomy market atmosphere.
The Northern Ireland Protocol (NIP) has increased uncertainty, affecting the Pound Sterling in the UK. This week, the background may be tainted, but the effect on the UK’s economic picture will be seen for a few months. Conservative rebels are steadfastly resisting the measure in the meanwhile.
USD/INR Price News: The upside is favored as US rates rose overnight.
In the Asian session, the USD/INR pair aims to overcome the nearby resistance of 82.80. Supported by positive preliminary S&P United States PMI data, the asset is anticipated to discount the effects of the overnight increase in US Treasury rates.
The preliminary S&P Manufacturing PMI for February increased from 47.3, the consensus estimate, and 46.0. The Services PMI surged to 50.5 versus forecasts of 47.2 and 46.8 in the previous edition. A pickup in economic activity supports the Federal Reserve’s argument for further tightening policy (Fed). Undoubtedly, the expansionary economic activities show that consumer spending is rising again, which might cause a slowdown in the United States’ inflationary softening process.
After a corrective fall to close to 103.70, the US Dollar Index (DXY) has tried to recover. The Federal Open Market Committee (FOMC) minutes are anticipated to cause investors to stay apprehensive. Therefore the Dollar Index is attempting to retake Tuesday’s high above 103.90.
After a Tuesday that was quite gloomy, S&P500 futures have started to climb upward. Given that the general market sentiment supports the risk aversion theme, time is unsuitable for establishing long positions in risk-sensitive assets. However, the 10-year US Treasury rates have slightly decreased to close to 3.94% after reaching a new three-month high of 3.96% on Tuesday.
EUR/USD Price Analysis: Recovery extends over 1.0660 as investors’ risk-taking ability strengthens.
After falling to around 1.0640 in the Asian session, the EUR/USD pair has seen a buying activity. The main currency pair has recovered as market players’ willingness to take risks has increased. While investors expect the publication of the Federal Open Market Committee (FOMC) minutes, it would be premature to say that the US Dollar Index (DXY) is fully recovered after a corrective move amid a resurgence in the risk-on attitude.
In the Asian session, S&P500 futures have made some respectable gains after a sharp sell-off on Tuesday. Investors were compelled to sell US equities due to long weekend-related volatility and positive preliminary S&P PMI statistics for the United States.
Headline inflation has started to slow down, but European Central Bank (ECB) President Christine Lagarde reaffirmed that they plan to hike the key rates by 50 basis points (bps) at the next policy meeting. She said the central bank is not seeing a wage-price spiral in the Eurozone.
At the 61.8% Fibonacci retracement (from the low on January 6 at 1.0483 to the high in February at 1.1033), around 1.0693, the EUR/USD constantly encounters barriers. The emergence of the Symmetrical Triangle chart pattern indicates a reduction in volatility for the asset.
For the Euro bulls, the 100-period Exponential Moving Average (EMA) around about 1.0700 will continue to serve as a formidable barrier.
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