Forex Today: Markets try to settle down ahead of US inflation data


Here is what you need to know on Tuesday, March 14:

Markets stay relatively quiet early Tuesday as investors try to figure out how the major central banks' policy will be shaped after the collapse of Silicon Valley Bank (SVB) revealed vulnerabilities in the financial sector. Ahead of the February Consumer Price Index (CPI) data from the US, the US Dollar Index clings to modest recovery gains near 104.00 and the benchmark 10-year US Treasury bond yield looks to stabilize at around 3.5%. Following Monday's mixed trading in Wall Street, US stock index futures trade modestly higher in the European morning.

US Inflation Preview: Five scenarios for trading the Core CPI whipsaw within the SVB storm.

Annual inflation in the US, as measured by the CPI, is forecast to decline to 6% in February from 6.4% in January. The Core CPI is expected to come in at 0.4%.

Pressured by the collapse of SVB and Signature Bank, S&P 500 Financials Index lost nearly 4% on Monday. Meanwhile, Moody's announced late Monday it downgraded the debt rating of Signature Bank to "junk" and places First Republic Bank (FRC.N), Zions Bancorporation (ZION.O), Western Alliance Bancorp (WAL.N), Comerica Inc (CMA.N), UMB Financial Corp and Intrust Financial Corporation under review.

EUR/USD climbed to its highest level in a month at 1.0750 on Monday but lost its traction on Tuesday. As of writing, the pair was trading in negative territory below 1.0700. In an interview with a Greek newspaper on Tuesday, European Central Bank (ECB) policymaker Yannis Stournaras said that he doesn't see any impact from the collapse of SVB on Eurozone banks.

Following Monday's sharp upsurge, GBP/USD has gone into a consolidation phase below 1.2200. The data published by the UK's Office for National Statistics showed on Tuesday that the ILO Unemployment Rate remained unchanged at 3.7%. Additionally, Average Earnings Including Bonus rose by 5.7% in three months to January, down from 6% in December.

USD/JPY lost nearly 2% on Monday and touched its lowest level below 132.50 before staging a rebound in the late American session. The pair clings to modest recovery gains at around 133.50 in the European morning.

Gold price extended its bullish rally and gained more than 2% on Monday. Following a technical correction toward $1,900 in the late Asian session, XAU/USD managed to regain its traction and was last seen trading slightly above $1,910.

Following Sunday's upsurge, Bitcoin gained nearly 10% on Monday and continued to stretch higher toward $25,000 early Tuesday before losing its traction. At the time of press, BTC/USD was trading marginally higher on the day at $24,380. Ethereum closed the third straight day in positive territory and rose nearly 15% in that period. ETH/USD stays relatively quiet on Tuesday and trades slightly below $1,700.

 

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 stays in positive territory above 1.0850 after US data

EUR/USD stays in positive territory above 1.0850 after US data

EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.

EUR/USD News

GBP/USD stabilizes above 1.2850 as risk mood improves

GBP/USD stabilizes above 1.2850 as risk mood improves

GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.

GBP/USD News

Gold rebounds above $2,380 as US yields stretch lower

Gold rebounds above $2,380 as US yields stretch lower

Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.

Gold News

Avalanche price sets for a rally following retest of key support level

Avalanche price sets for a rally following retest of  key support level

Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.

Read more

The election, Trump's Dollar policy, and the future of the Yen

The election, Trump's Dollar policy, and the future of the Yen

After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.

Read more

Forex MAJORS

Cryptocurrencies

Signatures