EUR/USD, GBP/USD And AUD/USD Is Decreasing, USD/JPY Is Trading Close To 136.00
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The U.S. dollar held steady on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted it might nearly be done with monetary tightening. The RBA is no exception in warning of further tightening. Central bankers, including the US Fed and European Central Bank, said more work needed to be done to fight inflation.
The prospects for further policy tightening by the Fed continue to act as a tailwind for the US Dollar (USD), the markets seem convinced that the US central bank will stick to its hawkish stance and keep rates higher for longer in the wake of stubbornly high inflation. The bets were lifted by the incoming US macro data.
Investors will also face the release of the closely watched monthly US employment data, popularly known as the NFP, this week.
USD/JPY
The USD/JPY pair started trading above 136.00 on Tuesday and traded above 136.10 in the first hours. The yen pair failed to hold and fell below 136.00 and tested the level of 135.8440. In the European session there was an even greater drop to 135.60. Currently, the pair has managed to rebound and the hadel takes place close to 136.00.
The decline, however, remains contained amid expectations that the Bank of Japan will maintain very loose policy to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, said last week that the central bank is not aiming for a quick turnaround from a decade of massive monetary easing.
As such, the BoJ's monetary policy decision, scheduled to be announced on Friday, is unlikely to give the JPY any respite.
EUR/USD
The euro pair traded high above 1.0680 in the Asian session. In the European session, the EUR/USD pair fell below 1.0660. At the time of writing, the EUR/USD pair is just above 1.0660.
Looking ahead, it seems that comments from central bank officials could be a driving force for the EUR/USD rate along with other FX markets and bond markets in general.
The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22.
An additional risk of events may also be data on GDP in the whole euro, which will be released on Wednesday.
GBP/USD
The cable pair started trading above 1.2020 and traded around this area in the Asian session. GBP/USD managed to rise above 1.2060 but lost momentum and fell below 1.20. The pound pair is at the time of writing just below 1.20, at 1.1992.
Although the US dollar came under renewed selling pressure on Monday, the GBP/USD pair struggled to gain traction.
Furthermore, a sense of stability has returned to the UK property market after last year's turmoil, with a second consecutive month of gains after falling in December 2022. However, prices remain at 2.5% q/q, and underlying activity continues to indicate a downtrend.
AUD/USD
The pair of the Australian started trading above 0.67, but had already fallen to 0.66 earlier in the Asian session. The Aussie pair is currently trading below 0.6670.
The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points in an attempt to control inflation reaching its highest level in three decades.
The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed.
Source: finance.yahoo.com, investing.com
