Pre Loader

07.03.2024 Market Report


EUR/USD remains steady around 1.0900 during the Asian session on Thursday, retracing slightly from its six-week high of 1.0915 reached in the prior session following dovish remarks by Fed Chair Jerome Powell during his testimony before the House Financial Services Committee.


The GBP/USD pair breaks above the 1.2700 barrier and trades around 1.2735 during the Asian session on Thursday. The uptick of the major pair is bolstered by the weaker US Dollar and encouraging news from the UK Spring Budget.


Rumors that the Bank of Japan (BoJ) could be preparing to raise interest rates have reignited speculative interest in the Yen and led many to hail a renaissance in the currency. 

Japan’s negative interest rates have long made the Yen a popular funding currency for the carry trade. This is an operation in which investors borrow in a currency with a low interest rate, like the JPY, and use the relatively cheap loan to fund the purchase of a currency with a higher interest rate, such as the US Dollar (USD), pocketing the difference in rates as profit. Over time this has acted as a negative factor for JPY and driven the USD/JPY to new highs. 


AUD/USD knocked into a two-week high near 0.6580 after Federal Reserve (Fed) Chairman Jerome Powell kicked the legs out from underneath the US Dollar (USD) on Wednesday. Fed Chair Powell noted that the Fed doesn’t see increased risk of an economic recession in the US this year while testifying before the US Congressional House Financial Services Committee. The head of the US central bank is expected to deliver further comments on Thursday when he appears for day two of the Fed’s Semi-Annual Monetary Policy Report.


The NZD/USD pair trades with a mild positive bias below the mid-0.6100s during the early Asian session on Thursday. The softer US Dollar (USD) to multi-week lows after Chair Powell’s first testimony provides some support to the NZD/USD pair. At press time, the pair is trading at 0.6130, gaining 0.02% on the day. 


The USD/CAD pair struggles to capitalize on the Asian session uptick on Thursday and languishes near the 1.3500 psychological mark, just above a one-week low touched the previous day.

Mixed signals on the Federal Reserve’s (Fed) rate-cut path fail to assist the US Dollar (USD) to register any meaningful recovery from its lowest level since early February, which, in turn, is seen acting as a headwind for the USD/CAD pair. Fed Chair Jerome Powell told US lawmakers on Wednesday that the central bank will cut interest rates this year, though wants to see more evidence that inflation is falling to the 2% target. Minneapolis Fed President Neel Kashkari, however, downplayed speculations about more aggressive policy easing and said that he may reduce the number of cuts this year, possibly to only one in the wake of the incoming stronger US macro data.


The USD/CHF pair finds some support above the 0.8800 mark during the early European session on Thursday. The pair trades in negative territory for the third consecutive day as the rising prospects of a rate cut by the Fed in June drag the US dollar (USD) lower. USD/CHF currently trades near 0.8810, down 0.12% on the day. 


Oil prices fell slightly in Asian trade on Thursday, cutting short a recent rally as markets awaited more cues on demand from top importer China.


Gold built on its recent breakout momentum and touched a fresh all-time peak, around the $2,152 region on Wednesday amid expectations for an imminent shift in the Fed’s policy stance. Meanwhile, any meaningful corrective decline in the XAU/USD price seems elusive amid persistent geopolitical tensions.

Any information provided therein are indicative and subjective to the technical analysis method or trading patterns used and the timing of their release. Those are provided as general market information and/or market commentary and/or the publication of market/factual data and should not be construed as containing personal and/or other investment recommendation, and/or to be Investment Advice or independent Investment Research. As such, the legal and regulatory requirements in relation to independent investment research do not apply to this material and it is not subject to any prohibition on dealing ahead of its dissemination. For the full Risk Disclaimer click here.