EUR/USD, GBP/USD And AUD/USD Is Trading In Red, Only USD/JPY Is Positive
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The dollar rose in somewhat calmer trading on Tuesday after collapsing on Monday following the collapse of Silicon Valley Bank (SVB) as investors waited for the release of US consumer inflation data later in the day.
Tuesday's data on the Consumer Price Index (CPI) could potentially fuel further volatility in global markets, coming a day after fears of a potential banking crisis caused traders to quickly lower their expectations of a Federal Reserve rate hike.
Over the weekend, US authorities took emergency action in response to the collapse of the SVB, promising depositor protection to bolster bank confidence. US President Joe Biden on Monday announced measures to ensure the security of the banking system.
USD/JPY
The yen pair started the day at 133.0870. The USD/JPY pair rose towards 134.00 in the first hours of trading, but failed to maintain momentum and fell towards 133.25. From then on, USD/JPY traded around 133.50 until the end of the Asian session. In the European session there was an upward impulse and the yen pair breaks through 134.00. At the time of writing, USD/JPY is above 134.10.
EUR/USD
The Asian session for the euro pair, which started Tuesday's session at 1.0727, was bearish. At the end of the Asian session, EUR/USD fell below 1.07. The European session brought an upward impulse to the EUR/USD pair and the trade rebounds above 1.07 again.
The euro is trading cautiously this morning which is to be expected as markets prepare for the upcoming US CPI report.
Meanwhile, markets are also trying to figure out whether SVB collapse will influence the European Central Bank's (ECB) rate decision later this week.
ECB policymaker Yannis Stournaras said on Tuesday that he does not see any impact from the collapse of Silicon Valley Bank (SVB) on Eurozone banks. Although the ECB is in quiet period, the Euro could stay resilient against its rivals in case other ECB policymakers deliver similar comments.
GBP/USD
The cable pair started Tuesday's session at the level of 1.2168 and, just like the euro pair, was in a downward move in the Asian session. Towards the end of the Asian session, the GBP/USD pair got a strong upward impulse towards 1.2180. In the European session, the pound pair again started to fall towards 1.2150. At the time of writing, GBP/USD is trading above 1.2160.
Early Tuesday, the data published by the UK's Office for National Statistics showed that the Unemployment Rate remained unchanged at 3.7% in three months to January. More importantly, annual wage inflation in the three months to January, as measured by Average Earnings Including Bonus, declined to 5.7% from 6% in December. Similarly, Average Earnings Excluding Bonus retreated to 6.5% in the same period from 6.7%.
AUD/USD
The Aussie pair started trading at 0.6656 and like the European pairs the first move was down. Still in the Asian session, the AUD/USD pair rebounded and grew towards 0.6672. The upward momentum was not maintained in the European session and the pair of the Australian pair started a downward move towards 0.6645. At the time of writing, AUD/USD is trading at 0.6651.
Most Asian currencies weaken against the USD in the morning session amid higher Treasury yields.
Source: investing.com, finance.yahoo.com
