The Greenback remained slightly on the back foot on Wednesday amidst alternating risk appetite trends and the lack of surprises from the FOMC Minutes, while bets on the potential timing of the first rate cut by the Fed continued to dominate the broad sentiment.
Here is what you need to know on Thursday, February 22:
The USD Index (DXY) traded with tepid losses around the 104.00 region against the backdrop of further advances in risk-linked assets. It is PMI day across the board on February 22, while the usual weekly Initial Jobless Claims are also due along with Existing Home Sales, and the Chicago Fed National Activity Index. In addition, FOMC’s Cook, Kashkari, Jefferson, and Harker are due to speak.
EUR/USD maintained its gradual bullish view and rose further north of the 1.0800 hurdle. On February 22, advanced PMIs in Germany and the broader Euroland are expected, seconded by the ECB Accounts and the final Inflation Rate in the euro bloc.
GBP/USD added to Tuesday’s gains and looked to consolidate the move beyond 1.2600 the figure. Preliminary PMIs will be the only releases of note across the Channel on February 22.
USD/JPY kept its multi-session consolidative phase well and sound around the 150.00 zone. In Japan, weekly Foreign Bond Investment readings are scheduled for February 22.
AUD/USD alternated gains with losses in the upper end of the range, an area coincident with the key 200-day SMA around the 0.6560 region. Flash Judo Bank PMIs are due Down Under on February 22.
The resurgence of the tight supply narrative lent support to the prices of WTI, which flirted once again with the $78.00 mark per barrel.
Gold prices advanced modestly to the $2,030 region, maintaining their positive streak in place. In the opposite direction, Silver prices extended their leg lower for the third consecutive day.
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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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