Forex Today: Tension mounts ahead of US inflation data

Valeria Bednarik FXStreet

What you need to know on Wednesday, February 9:

Major pairs continued lacking certain directional strength and held within limited intraday ranges on Tuesday. The greenback found some strength in soaring government bond yields, as that on the US 10-year Treasury note reached 1.97%. However, yields’ strength was barely enough to prevent the dollar from plummeting.

The EUR/USD pair briefly pierced the 1.1400 level but ended the day in the 1.1410 price zone. Comments from the European Central Bank member Francois Villeroy put some pressure on the shared currency by the end of the day, as he noted that the market may have overreacted to President Christine Lagarde’s words last week.

UK Prime Minister Boris Johnson reshuffled its cabinet. Jacob Rees-Mogg has become the new Brexit Minister, while Mark Spencer replaced him as leader of the Commons. Chris Heaton-Harris becomes the new chief whip, while Paymaster General Michael Ellis would take on the additional role of minister for the Cabinet Office. The decision comes in the middle of the lockdown parties’ scandal, which menaces Johnson’s leadership. GBP/USD trades around 1.3550.

The AUD/USD pair is up for a second consecutive day trading in the 0.7140 region. The USD/CAD pair edged higher and currently hovers around 1.2700, as lower oil prices undermined demand for the Canadian dollar. The greenback posted modest gains against safe-haven CHF and JPY.

Gold surged to a fresh two-week high of $1,828.36 a troy ounce, holding nearby at the end of the day. Meanwhile, WTI trades at $89.80 a barrel.

Market players keep waiting for January US inflation figures to be out on Thursday.

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

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Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.