Forex Today: Global inflation fears offer little help to the USD


What you need to take care of on Thursday, March 2:

The US Dollar dropped across the board on Wednesday, even as US yields jumped. Most European stock markets posted losses, and in Wall Street, indexes were mixed. The market hit bottom after the release of the US ISM Manufacturing PMI but then recovered. 

The February Index rose to 47.7, showing the sector remains in contraction territory. The surprise came from the Price Paid Index, which jumped 6.8 points to 51.3 and triggered a sell-off in Treasuries and a short-lived recovery of the US Dollar. Currencies reflected somewhat more optimism than equities. Chinese PMIs rose above 50, leading to hopes for the economic outlook.

Market participants will continue to look closely at the bond market after a day in which US and European bond yields jumped after inflation figures. The economic calendar shows for Thursday Eurozone CPI, European Central Bank minutes and US Initial Jobless Claims.

The Euro was among the top performers across the FX board, boosted by higher-than-expected German inflation numbers and hawkish ECB expectations. EUR/USD hit weekly highs near 1.0700 and then pulled back. The Pound lagged with GBP/USD testing levels under 1.2000. USD/JPY ended flat on Wednesday despite higher government bond yields.

AUD/USD rebounded from monthly lows, being able to defend the 0.6700 support. The Kiwi was the best performer on Wednesday, with NZD/USD hitting the highest level in two weeks at 0.6275. USD/CAD dropped modestly and is hovering around 1.3600.

Gold rose for the second day in a row despite higher yields, finding resistance at $1,845/oz. Bitcoin was unable to regain $24,000 and pulled back.

 


Like this article? Help us with some feedback by answering this survey:

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD trades at yearly lows below 1.0500 ahead of PMI data

EUR/USD trades at yearly lows below 1.0500 ahead of PMI data

EUR/USD stays on the back foot and trades at its lowest level since October 2023 below 1.0500 early Friday, pressured by persistent USD strength. Investors await Manufacturing and Services PMI surveys from the Eurozone, Germany and the US.

EUR/USD News
GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2600. This downside is attributed to the stronger US Dollar (USD) as traders continue to evaluate the Fed's policy outlook following latest data releases and Fedspeak.

GBP/USD News
Gold rises toward $2,700, hits two-week top

Gold rises toward $2,700, hits two-week top

Gold continues to attract haven flows for the fifth consecutive day and rises toward $2,700. XAU/USD continues to benefit from risk-aversion amid intensifying Russia-Ukraine conflict. Investors keep a close eye on geopolitics while waiting for PMI data releases. 

Gold News
Ripple surges to a new yearly high; XRP bulls aim for three-year high of $1.96

Ripple surges to a new yearly high; XRP bulls aim for three-year high of $1.96

Ripple extends its gains by around 10% on Friday, reaching a new year-to-date high of $1.43 and hitting levels not seen since mid-May 2021. The main reasons behind the rally are the announcement that the US SEC's Chair Gary Gensler will resign and the launch in Europe of an XRP  ETP by asset management company WisdomTree.

Read more
A new horizon: The economic outlook in a new leadership and policy era

A new horizon: The economic outlook in a new leadership and policy era

The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures