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06.03.2023 Market Report


EUR/USD is extending gains to near 1.0660 early Monday, underpinned by renewed US Dollar weakness. Markets shrug off disappointing China’s GDP growth target, as they adjust their positions ahead of a busy week. Eurozone Sentix and Retail Sales data coming up next. 


GBP/USD is trading on the back foot below 1.2050 in the early European morning. The pair fails to benefit from a broadly subdued US Dollar, as the market sentiment remains mixed and Brexit optimism fades. US economic data and Powell’s testimony are in focus. 


USD/JPY retreats to 135.80 as it reverses the bounce off intraday low amid a sluggish start to the key week. The Yen pair trader’s cautious mood ahead of the Bank of Japan (BoJ) monetary policy meeting and Federal Reserve (Fed) Chairman Jerome Powell’s half-yearly Testimony appears to be the key filters for the Yen pair. Also challenging the quote’s moves could be the latest inaction of the US Treasury bond yields, as well as the mixed signals from China.


AUD/USD treads water on a daily basis around 0.6760-70, despite recently picking up bids to pare the early losses heading into Monday’s European session. It’s worth noting that the Aussie pair marked the first weekly gain in three amid broad US Dollar weakness in the last week. That said, the recent positive headlines from China, after an initial disappointment, seem to help the Aussie pair of late.


NZD/USD retreats to 0.6210 after posting the first weekly gain in five as challenges to sentiment probe the Kiwi pair buyers early Monday. In doing so, the quote takes clues from the market’s cautious mood ahead of Federal Reserve (Fed) Chairman Jerome Powell’s half-yearly Testimony and the US employment report for February. Adding strength to the pullback moves could be the headlines from China’s annual session of the National People’s Congress (NPC).


The USD/CAD pair kicks off the new week on a subdued note and seesaws between tepid gains/minor losses, around the 1.3600 mark heading into the European session. The pair, meanwhile, remains within Friday’s broader trading range and is influenced by a combination of diverging forces. A softer tone surrounding the US Treasury bond yields keeps the US Dollar bulls on the defensive, which, in turn, acts as a headwind for the USD/CAD pair. That said, a modest pullback in Crude Oil prices – amid worries that a deeper global economic downturn will dent fuel demand – undermines the commodity-linked Loonie and lends some support to the major. The fears resurfaced after China set a lower-than-expected target for economic growth and forecast that the economy would expand by 5% in 2023.


USD/CHF remains sidelined around 0.9420 during early Friday, after retreating from the Year-To-Date (YTD) high before a few hours. That said, the Swiss currency pair rose to the three-month high the previous day amid broad-based US Dollar run-up but mixed comments from the Fed officials joined unimpressive US data to challenge the bulls afterward. Also challenging the quote could be the cautious mood ahead of the key US ISM Services PMI for February.


Oil prices retreated on Monday as a weaker-than-expected GDP forecast from China dented some optimism over a recovery in crude demand this year, while markets also hunkered down before a slew of cues on U.S. monetary policy this week.


Gold price oscillates in a narrow trading band through the Asian session on Monday and consolidates last week’s gains to its highest level since mid-February. The US Dollar kicks off the new week on a softer note amid a further pullback in the US Treasury bond yields and acts as a tailwind for the US Dollar-denominated commodity.

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