What you need to take care of on Friday, March 18:
The American Dollar remained under selling pressure throughout the day, accelerating its slump ahead of the London fix. The greenback was affected by persistent weakness in government bond yields following the hawkish Federal Reserve's announcement on Wednesday.
By the end of the American session, US Secretary of State Antony Blinken said that Russia might be contemplating a chemical-weapons attack, helping the greenback to recover some ground.
The Russian invasion of Ukraine keeps going without progress in peace talks. Financial markets enjoyed some temporal relief on headlines indicating that international bondholders received Russian bond coupon payments due March 16th in dollars. Nevertheless, there's an increased risk to global growth, while the war will only fuel inflationary pressures.
Ukraine and Turkey are working on setting up a meeting between Volodymyr Zelenskyy and Vladimir Putin. US President Joe Biden will talk to his Chinese counterpart Xi-Jinping on Friday to discuss the matter.
The Bank of England hiked the benchmark UK interest rate by 25bps to 0.75% from 0.50%, as had been widely expected, noting that "some further modest tightening might be appropriate in the coming months," a dovish twist that sent GBP/USD to an intraday low of 1.3087. The pair managed to recover some ground and settled at 1.3150.
The EUR/USD pair retreated from an intraday high of 1.1137 and finished the day in the 1.1090 price zone, while USD/CAD plunged to 1.2630 as oil recovered the upside, with WTI ending the day at $103.75 a barrel.
Gold flirted with $1,950 a troy ounce, ending the day at around 1,939. The AUD/USD pair retained most of its intraday gains and trades in the 0.7370 price zone.
The USD/JPY pair consolidated its latest gains, ending the day unchanged at around 118.60.
Bitcoin price maintains uptrend in response to the Federal Reserve's rate hike
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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