EUR/USD
The EUR/USD pair claws back some of its early losses during the late Asian trading session on Monday, but is still 0.25% down to near 1.1780.
Earlier in the day, the Euro (EUR) declined sharply against the US Dollar (USD) as investors shifted to the safe-haven fleet amid the brutal war between Iran, Israel, and the United States (US), which broke out over the weekend.
GBP/USD
GBP/USD rebounds from the daily losses, trading around 1.3450 during the Asian hours on Monday. The technical analysis of the daily chart indicates an ongoing bearish bias, as the pair trades within a descending channel pattern.
USD/JPY
The USD/JPY pair is up 0.5% to near 157.00 during the European trading session on Monday, rising closer to the monthly high of 157.30. The pair strengthens as the US Dollar (USD) outperforms its peers amid the ongoing war between the United States (US), Isreal and Iran.
AUD/USD
The AUD/USD pair rebounds following the weekly bearish gap opening to the 0.7030 area, or the lower end of a three-week-old range, and climbs back above the 0.7100 mark during the Asian session.
Despite the global flight to safety, the safe-haven US Dollar (USD) struggles to capitalize on its intraday move up to the highest level since January 23 amid stagflation fears. The US Producer Price Index (PPI), released on Friday, revived concerns about still sticky inflation. Furthermore, slowing economic growth creates a scenario where the Federal Reserve (Fed) cannot cut interest rates without reigniting inflation or hold without slowing the economy further. This, in turn, keeps a lid on the USD and acts as a tailwind for the AUD/USD pair amid the Reserve Bank of Australia’s (RBA) hawkish stance.
NZD/USD
The NZD/USD pair finds decent support near the lower boundary of an over one-week-old range and attracts some buyers near the 0.5950-0.5945 region during the Asian session on Monday. Spot prices, however, remain below the 0.6000 psychological mark amid a fresh wave of the global risk-aversion trade.
USD/CAD
USD/CAD gains ground after registering modest losses in the previous session, trading around 1.3660 during the Asian hours on Monday. The pair appreciates as the US Dollar (USD) rises on increased safe-haven demand amid escalating Middle East tensions. Traders await the ISM Manufacturing Purchasing Managers’ Index (PMI) due later in the day.
USD/CHF
The USD/CHF pair gathers strength to around 0.7695 during the early European trading hours on Monday. The Greenback edges higher against the Swiss Franc (CHF) as the hotter US January Producer Price Index (PPI) report reinforced the case that the Federal Reserve (Fed) will hold interest rates steady at its upcoming March meetings.
CRUDE OIL
Oil prices could remain elevated in the near term following the latest Middle East escalation, with Texas Capital analysts warning of a potential short-term spike.
Gold (XAU/USD) touches a fresh high since late January during the early European session on Monday, which bulls now looking to build on the momentum beyond the $5,400 mark amid the global flight to safety.
A dramatic escalation of geopolitical tensions in West Asia over the weekend unsettles global markets. In fact, the US and Israel launched a coordinated military strike on Iran, killing Supreme Leader Ayatollah Ali Khamenei. Adding to this, Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy announced the closure of a critical maritime chokepoint – the Strait of Hormuz – and raised the risk of a protracted war in the Middle East. This, in turn, provides a strong boost to the traditional safe-haven Gold at the start of a new week.
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