The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50
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The dollar was parked below recent peaks on Tuesday, as a three-week rally faded and traders waited on economic data to figure out whether it's warranted to push the dollar up any further.
Strong U.S. labour data and sticky inflation have raised U.S. rate expectations and supported the dollar's rally this month - Tuesday's European and U.S. manufacturing data and Friday's core PCE price index will guide the next steps.
After an unannounced visit to Kiev, US President Joe Biden will visit Poland on Tuesday. Biden will reportedly talk about strengthening Poland's security by increasing NATO's presence in the country.
USD/JPY
USD/JPY regains positive traction on Tuesday and maintains its bidding tone throughout the first half of the European session. The pair is gradually approaching the level of 135.00. The yen pair at the time of writing is close to 134.70.
The services PMI in Japan turned out to be much better than expected and from the previous reading. The manufacturing PMI was well below expectations, falling month-on-month.
On the policy front, the European Central Bank has continued to aggressively tighten policy, despite signs that inflationary pressures may have peaked.
The European Central Bank raised interest rates by 50 basis points at its February meeting to the highest level since late 2008, marking another hike of the same magnitude next month and reaffirming its commitment to fighting inflation.
Source: investing.com
EUR/USD
The euro stayed below USD 1.07, oscillating around the weakest level since January 6.
In the eurozone and Germany, the manufacturing PMIs turned out to be weak, below expected levels. Services PMI rose. And also ZEW economic sentiment showed an improvement in sentiment.
Source: investing.com
Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM
GBP/USD
The data on public finances in the UK released this morning exceeded estimates.
The pound strengthened on Tuesday after data showed an unexpected rebound in UK business activity, suggesting the economy could avoid a deep recession. The pound managed to break through 1.2100 and is currently trading just above.
UK data showed private sector business activity surged in early February with the Composite PMI rising to 53 from 48.5, providing a boost to sterling.
As the UK private sector is resilient to strong inflation, the Bank of England is likely to continue to raise its key rate without worrying about a deep recession.
British Foreign Secretary James Cleverly said late Monday evening that they would hold further talks with the EU over the Northern Ireland Protocol in the coming days. Cleverly is also reportedly planning to address Tory MPs on Wednesday to give an update on the negotiations.
Source: investing.com
AUD/USD
The minutes of the RBA meeting revealed most of what was already known to the market. The outlook for the Australian economy has many positive aspects, but a potential concern is that the CPI outperforms both PPI and wage inflation.
The year-on-year CPI by the end of 2023 was 7.8%, and the PPI in the same period was 5.8%. Tomorrow the Australian Bureau of Statistics (ABS) will release the Wage Price Index.
The AUD/USD pair came under renewed selling pressure on Tuesday and reversed much of the positive move from the previous day. The pair remains below the 0.6900 level for the first half of the European session. The Aussie pair is above 0.6880.
Source: investing.com, finance.yahoo.com
