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15.03.2023 Market Report


EUR/USD is retreating toward 1.0700 in early Europe. The US Dollar is finding its feet amid increased odds of a 25 bps March Fed rate hike. Meanwhile, fears calm over the SVB fallout but EUR/USD fails to capitalize ahead of Eurozone and US data. 


GBP/USD is trading modestly flat at around 1.2150 in the early European morning. Risk tone remains calmer amid the ebbing US banking crisis while the US Dollar attempts a bounce on higher Treasury bond yields UK Budget report and US data awaited. 


USD/JPY seesaws around intraday high as it extends the previous day’s recovery from the monthly low to 134.55 during early Wednesday. In doing so, the Yen pair cheers the recently widening difference between the US 10-year and two-year Treasury bond yields. Adding strength to the upside momentum could be the fears of a less efficient wage increase in Japan and the Bank of Japan (BoJ) policymakers’ rejection of the tighter monetary policy.


AUD/USD picks up bids to extend the recovery from the intraday low towards 0.6700 even as markets remain dicey Australia’s biggest customer, namely China, prints mixed data during early Wednesday. That said, China’s Industrial Production 2.4% during January-February period versus 2.6% expected and 1.3% prior whereas the Retail Sales matches 3.5% forecasts  during the stated period compared to -1.8% prior. Earlier in the day, the People’s Bank of China (PBOC) held its one-year benchmark rate, namely the one-year Medium-term Lending Facility (MLF) rate, unchanged at 2.75%.


NZD/USD is facing hurdles in stretching its recovery above the 0.6250 mark in the early European session. The Kiwi asset has sensed barricades near 0.6250 as the recovery attempt by the US Dollar Index (DXY) has trimmed the pace of the upside move. After printing a fresh monthly low at 103.44, the USD Index has attracted bids and has scaled above 103.60. The downside bias for the USD Index looks solid as the Federal Reserve (Fed) is likely to avoid the option of bigger rate announcement as the United States inflation has softened, the Unemployment Rate has increased, and the US economy’s confidence has been hit hard after the catastrophic collapse of Silicon Valley Bank (SVB).


USD/CAD holds lower grounds near the one-week bottom, marked the previous day, as it prints mild losses near 1.3670 during a four-day south-run amid early Wednesday in Europe. In doing so, the Loonie pair cheers the broad US Dollar weakness and the latest recovery in Canada’s key export item WTI crude oil.


USD/CHF reverses from the intraday high to 0.9140 as it fades the previous day’s recovery from a six-week low during early Wednesday. Even so, the Swiss Franc (CHF) pair remains indecisive on a day while tracing the sluggish markets amid mixed clues. Recently increasing calls of the Fed’s 0.25% rate hike, versus fears of no move due to the challenges for the US banks emanating from the fallouts of the Silicon Valley Bank (SVB) and Signature Bank, seem to underpin the US Dollar’s run-up even as the inflation data eased. Also supporting the greenback could be the latest recovery in the US Treasury bond yields.


Oil prices rose on Wednesday as a drop to three-month lows attracted some bargain buying, while optimism over Chinese demand, following strong economic data and a hike in the OPEC’s outlook for the country, also aided sentiment.


Gold price is consolidating the previous decline so far this Wednesday, hanging close to the $1,900 threshold. Gold sellers remain in control amid a better market mood and broadly subdued United States Dollar (USD), as the dust settles over the US banking crisis and US CPI data. 

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