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28.02.2023 Market Report


EUR/USD is holding a lower ground below 1.0600 in early Europe. The pair has stalled its recovery amid resurgent US Dollar demand, as risk sentiment turns sour. ECB official Lane joined the chorus for a 50 bps rate hike in March. US data is next in focus. 


GBP/USD is trading under pressure toward 1.2000, as Brexit deal-inspired optimism fades heading into Tuesday’s London open. The US Dollar rebound amid a negative shift in the market’s risk perception is weighing on the pair ahead of BoE-speak and US data. 


USD/JPY treads water around 136.10-20 during Tuesday’s Asian session while portraying the market’s inaction amid the month-end positioning and a lack of major data/events. Even so, dovish comments from the incoming Bank of Japan (BoJ) officials join cautious optimism to put a floor under the Yen price after it reversed from the two-month high on Monday.


A recovery move in the Aussie asset from the 0.6700 mark lacks strength as the risk-off mood has not disappeared yet. The US Dollar Index (DXY) has attempted a recovery after building a cushion around 104.30. However, a sideways performance is widely anticipated after a vertical downside move and ahead of the release of the United States ISM Manufacturing PMI data.


The NZD/USD pair delivered a downside break of the sideways auction formed in a range of 0.6160-0.6182 in the Asian session. The Kiwi asset has now slipped further and is declining towards 0.6130 in the early European session as the risk-on profile has retreated after a recovery move.


USD/CAD prints a gradual rebound from intraday low amid a sluggish end to February, picking up bids to 1.3585 heading into Tuesday’s European session. In doing so, the Loonie pair fails to justify the recent rebound in Canada’s key export item, namely WTI crude oil, as traders brace for the fourth quarter (Q4) Canadian Gross Domestic Product (GDP) data.


USD/CHF portrays the pre-data anxiety while making rounds to 0.9350 during early Tuesday. Even so, the cautious optimism in the market, as well as the broad US Dollar weakness, allows the Swiss currency pair to consolidate the first monthly gain in four.


Oil prices moved in a small range on Tuesday as traders awaited more cues from Chinese and U.S. business activity readings due this week, although fears of rising interest rates and slowing economic growth saw markets nursing steep losses.


Gold price remains sluggish as traders brace for a quiet end to the volatile February, after an upbeat start to the week. The yellow metal’s latest weakness could be linked to the mixed concerns surrounding the US-China ties, as well as the unimpressive prints of the second-tier US data.

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