Forex News Timeline

Tuesday, March 5, 2024

Japanese Deputy Chief Cabinet Secretary Hideki Murai said on Tuesday, “Japan is gradually seeing a positive cycle of rising growth; wages fall into place.” Additional comments Important to embed new business practices in japan so costs are appropriately passed on throughout supply chain.

Japanese Deputy Chief Cabinet Secretary Hideki Murai said on Tuesday, “Japan is gradually seeing a positive cycle of rising growth; wages fall into place.” Additional comments Important to embed new business practices in japan so costs are appropriately passed on throughout supply chain. Hopes Bank of Japan (BoJ) continues to work closely with government in guiding monetary policy to sustainably meet price target. Specific monetary policy decision up to BoJ, when asked whether conditions being met to end negative rates. BoJ has said whether or not to sustain easy monetary policy will depend on economic, price developments at the time. Market reaction The Japanese Yen is catching a small bid on the above comments, as USD/JPY loses 0.05% on the day to trade at 150.44, as of writing.

The Reserve Bank of India (RBI) is set to maintain a cautious stance on monetary policy.

The Reserve Bank of India (RBI) is set to maintain a cautious stance on monetary policy. In the view of economists at Wells Fargo, delayed easing should support the Indian Rupee (INR) over time.  Local politics should be a source of strength for the INR A patient and cautious monetary policy stance from the RBI should be supportive of the Indian Rupee over time. The Federal Reserve is likely to cut policy rates before the RBI, which should support the Rupee through more attractive interest rate differentials.  Our view for a Modi victory with a Lok Sabha majority should allow for broad-based policy continuity and further pursuit of reforms aimed at integrating India into the global economy and India's financial markets into the global financial system. Policy continuity should attract equity and debt inflows into India, and be supportive of the Rupee.  Finally, economic outperformance, fiscal responsibility and debt consolidation, and easing political risk should offer a rationale for credit rating agencies to upgrade India's sovereign credit rating. We see opportunity for the Rupee to strengthen over the longer term. As far as our long-term outlook, we believe the USD/INR exchange rate can strengthen to 82.00 by the end of 2024 and believe the foundation for Rupee strength to persist into 2025. By the middle of next year, we believe the USD/INR can move toward 81.00.  

Here is what you need to know on Tuesday, March 5: Major currency pairs continue to fluctuate in familiar ranges early Tuesday following Monday's indecisive action.

Here is what you need to know on Tuesday, March 5: Major currency pairs continue to fluctuate in familiar ranges early Tuesday following Monday's indecisive action. ISM Services PMI survey for February and Factory orders data for January will be featured in the US economic docket in the American session. S&P will also release final revisions to February PMI for the EU, Germany, the UK and the US. Federal Reserve Chairman Jerome Powell will present the semi-annual Monetary Policy Report on Wednesday and Thursday, the European Central Bank will announce policy decisions on Thursday and the US Bureau of Labor Statistics will release the February jobs report on Friday. The US Dollar (USD) struggled to gather strength against its rivals in the first half of the day on Monday. The bearish opening seen in Wall Street, however, helped the currency hold its ground and the USD Index (DXY) closed the day virtually unchanged. In the European morning on Tuesday, DXY trades marginally higher but stays below 104.00. In the meantime, US stock index futures are down between 0.3% and 0.5%, pointing to a cautious market mood, while the benchmark 10-year US Treasury bond yield stays quiet at around 4.2%. US Dollar price today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.  USDEURGBPCADAUDJPYNZDCHFUSD  0.07% 0.11% 0.17% 0.42% 0.01% 0.35% 0.10%EUR-0.07%   0.04% 0.10% 0.33% -0.05% 0.26% 0.05%GBP-0.10% -0.03%   0.06% 0.29% -0.10% 0.24% 0.01%CAD-0.17% -0.10% -0.07%   0.21% -0.15% 0.16% -0.07%AUD-0.42% -0.33% -0.29% -0.23%   -0.39% -0.07% -0.28%JPY-0.02% 0.07% 0.06% 0.16% 0.37%   0.34% 0.09%NZD-0.36% -0.26% -0.25% -0.18% 0.07% -0.35%   -0.21%CHF-0.11% -0.04% -0.01% 0.06% 0.30% -0.11% 0.24%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).   Despite the choppy action seen in foreign exchange markets, Gold gathered bullish momentum and extended its rally to a fresh 2024-high above $2,100 on Monday, rising more than 1.5% on a daily basis. XAU/USD consolidates its gains above $2,110 in the early European session.Gold price flirts with multi-month peak, bulls await more cues on Fed rate-cut path.EUR/USD closed marginally higher on Monday but retreated to the 1.0850 area early Tuesday. Eurostat will release Producer Price Index (PPI) data for January later in the session. The data from Japan showed early Tuesday that Tokyo Consumer Price Index jumped to 2.6% on a yearly basis in February from 1.8% in January. Tokyo CPI ex Food and Energy edged lower to 3.1% from 3.3% in the same period. USD/JPY showed no immediate reaction to these reading and was last seen moving sideways at around 150.50.Japanese Yen bulls shrug off stronger Tokyo CPI print, subdued USD price action.While speaking at the National People's Congress (NPC) annual meeting on Tuesday, China’s Premier Li Qiang noted that the foundation of China's economic recovery is not solid yet. According to Reuters, China is expected to set a growth target of 5% for 2024. AUD/USD came under bearish pressure during the Asian trading hours and was last seen losing nearly 0.5% on the day at around 0.6480.Australian Dollar moves below a psychological level amid a stable US Dollar.GBP/USD closed the second consecutive trading day in positive territory on Monday but reversed its direction after encountering resistance at around 1.2700. The pair stays on the back foot early Tuesday and edged lower toward 1.2670.

FX option expiries for Mar 5 NY cut at 10:00 Eastern Time, via DTCC, can be found below.

FX option expiries for Mar 5 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.0845 1.6b 1.0895 1b 1.0520 926m - GBP/USD: GBP amounts      1.2590 m - USD/JPY: USD amounts                      149.00 877m            149.50 1b 150.20 853m - USD/CAD: USD amounts        1.3400 421m 1.3535 480m 1.3550 932m - NZD/USD: NZD amounts 0.5955 680m 0.6175 698m 0.6280 573m USD/CNY: USD amounts 7.0000 600m 7.1000 624m 7.2000 603m

Japan's top currency diplomat Masato Kanda said on Tuesday, we “must brace for higher interest rates environment given assumed interest rates raised to 1.9% from 1.1%.” Additional quotes Must strive for responsible fiscal management by achieving primary budget balancing in FY2025/26.

Japan's top currency diplomat Masato Kanda said on Tuesday, we “must brace for higher interest rates environment given assumed interest rates raised to 1.9% from 1.1%.” Additional quotes Must strive for responsible fiscal management by achieving primary budget balancing in FY2025/26. International global order faces mounting challenges including that posed by "global south". We must maintain unwavering solidarity including support for Ukraine.

The EUR/JPY cross loses ground below the mid-163.00s during the early European trading hours on Tuesday.

EUR/JPY loses momentum around 163.22 following the rise in Japanese CPI inflation data. The Tokyo CPI climbed 2.6% YoY in February vs. 1.6% prior. The ECB is anticipated to hold the rate steady at 4.5% at its March meeting on Thursday.The EUR/JPY cross loses ground below the mid-163.00s during the early European trading hours on Tuesday. The rise in the Tokyo Consumer Price Index (CPI) for February triggered speculation that the Bank of Japan (BoJ) will exit the negative interest rate regime in the coming month, which lifts the Japanese Yen (JPY) and weighs on the cross lower. EUR/USD currently trades near 163.22, down 0.10% on the day. 

Data released from the Statistics Bureau of Japan on Tuesday revealed that the Tokyo CPI climbed 2.6% YoY in February from 1.6% in January. Additionally, the CPI ex Fresh Food and Energy eased to 3.1% YoY in January from the previous reading of 3.3%. The rise in price growth above the central bank’s target in February supported the case for the BoJ’s first interest rate hike since 2007. This, in turn, boosts the JPY against its rivals. 

The BoJ board member Hajime Takata hinted at a potential early move by the central bank to abandon its negative interest rate. He stated that the price aim was now within reach and it would be appropriate to change the monetary policy stance. Nonetheless, BoJ Governor Kazuo Ueda delivered a cautious view, saying that he would evaluate more data in order to confirm that a virtuous wage-price cycle is emerging.

On the Euro front, the European Central Bank (ECB) is expected to keep the main refinancing rate steady at 4.5% at its March meeting on Thursday. ECB President Christine Lagarde said last week that disinflation would persist but the central bank needs more evidence data before lowering the interest rate. Investors will take more cues from the press conference. A less hawkish tone could exert some selling pressure on the Euro (EUR) and create a headwind for the EUR/JPY cross. 

Later on Tuesday, the HCOB PMI data from Spain, Italy, France, Germany, and the Eurozone will be due. The Eurozone Retail Sales will be released on Wednesday. Market players will closely monitor the ECB rate decision on Thursday. These events could give a clear direction to the EUR/JPY cross.   

USD/CAD extends its winning streak for the second session on Tuesday amid a stable US Dollar (USD), which could be attributed to the risk aversion ahead of the key economic data from the United States (US).

USD/CAD could test the psychological resistance at 1.3600 on Monday.Technical analysis suggests a confirmation of the bullish trend for the pair.The key support area appears around the nine-day EMA at 1.3552 and the major support of 1.3550.USD/CAD extends its winning streak for the second session on Tuesday amid a stable US Dollar (USD), which could be attributed to the risk aversion ahead of the key economic data from the United States (US). The USD/CAD pair inches higher to near 1.3590 during the Asian trading hours. The technical analysis of the 14-day Relative Strength Index (RSI) is positioned above 50, suggesting bullish momentum for the USD/CAD pair to surpass the psychological resistance of 1.3600 following the major barrier of 1.3650. Furthermore, the lagging indicator, Moving Average Convergence Divergence (MACD), indicates a confirmation of a bullish trend for the USD/CAD pair. This interpretation is based on the MACD line's position above the centerline and the signal line. On the downside, the USD/CAD pair could find the key support region around the nine-day Exponential Moving Average (EMA) at 1.3552 aligned with the major support level of 1.3550. A break below this zone could prompt the pair to navigate the further support region around the 23.6% Fibonacci retracement level at 1.3505, in conjunction with the psychological level of 1.3500. USD/CAD: Daily Chart  

Russia S&P Global Services PMI declined to 51.1 in February from previous 55.8

The GBP/USD pair snaps the two-day winning streak during the early European session on Tuesday.

GBP/USD trades on a softer note around 1.2685 on the firmer USD. The pair maintains a bullish outlook above the key EMA. The key resistance level is seen at the 1.2700–1.2710 zone; the initial support level is located at 1.2650.The GBP/USD pair snaps the two-day winning streak during the early European session on Tuesday. The major pair edges lower amid the modest recovery of the US Dollar (USD). February’s labor market report this week will be a closely watched event. At press time, GBP/USD is trading at 1.2685, down 0.03% on the day. 

From a technical perspective, the bullish outlook of GBP/USD remains intact as the major pair is above the key 100-period Exponential Moving Average (EMA) on the four-hour chart. It’s worth noting that the Relative Strength Index (RSI) lies above the 50 midlines, indicating the path of least resistance is to the upside. 

The potential resistance level for the pair is seen at the 1.2700-1.2710 region, portraying the confluence of the upper boundary of the Bollinger Band, a psychological round figure, and a high of March 4. A break above this level will pave the way to a high of January 31 at 1.2750. Any follow-through buying will see a rally to a high of January 12 at 1.2785. 

On the downside, the initial contention level is located near the 100-period EMA at 1.2650. Further south, the next downside target will emerge near the lower limit of the Bollinger Band at 1.2612. The additional downside filter to watch is a low of February 20 at 1.2580, followed by a low of December 11 at 1.2535. GBP/USD four-hour chart 

India HSBC Composite PMI fell from previous 61.5 to 60.6 in February

Singapore Retail Sales (MoM) increased to -0.7% in January from previous -1.5%

Singapore Retail Sales (YoY) climbed from previous -0.4% to 1.3% in January

India HSBC Services PMI came in at 60.6 below forecasts (62) in February

NZD/USD trims some of its intraday losses as the NZX 50 Index recovers its daily losses on Monday.

NZD/USD faces struggles as traders adopt cautious stance before US key data.Fed’s Powell will testify before the US Congress regarding the Semi-Annual Monetary Policy Report on both Wednesday and Thursday.Chinese Services PMI fell to 52.5 in February from 52.7 prior.New Zealand Commodity Prices rose by 3.5% in February, against the previous rise of 2.1%.NZD/USD trims some of its intraday losses as the NZX 50 Index recovers its daily losses on Monday. The NZD/USD pair hovers around 0.6090 during the Asian session on Tuesday. The pair faces downward pressure on risk-off sentiment ahead of key US economic data this week, including the ISM Services PMI data, ADP Employment Change, and Nonfarm Payrolls for February. Traders are also keenly awaiting insights into the Federal Reserve's (Fed) stance and forthcoming policy decisions. Fed Chairman Jerome Powell is scheduled to testify before the US Congress' House Financial Services Committee regarding the Fed's Semi-Annual Monetary Policy Report on both Wednesday and Thursday. As per the CME FedWatch Tool, there is a 3.0% probability of a 25 basis points rate cut in March, with the likelihood of cuts in May and June standing at 21.8% and 50.9%, respectively. ANZ Commodity Prices, released by National Bank ANZ, increased by 3.5% in February, following January's increase of 2.1%. New Zealand's Manufacturing Sales for the fourth quarter is anticipated to be released on Thursday. Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr reiterated the central bank's plan to begin policy normalization in 2025, citing elevated inflation as a reason to maintain restrictive monetary policy for the foreseeable future. Moreover, China aims for approximately 5% GDP growth in 2024 by prioritizing job creation and risk management. Chinese authorities stress the importance of sustaining proactive fiscal policies and prudent monetary measures. This target could potentially bolster the New Zealand Dollar (NZD), given the close business ties between the two countries, consequently supporting the NZD/USD pair. Additionally, Chinese Services PMI contracted to 52.5 in February from 52.7 in the previous period.  

The EUR/USD pair struggles to capitalize on its strong gains registered over the past two days and oscillates in a narrow trading band during the Asian session on Tuesday.

EUR/USD oscillates in a narrow trading band on Tuesday amid mixed fundamental cues.Traders also opt to wait on the sidelines ahead of this week’s key central bank event risks.The downside seems limited amid reduced bets for more aggressive easing by the ECB.The EUR/USD pair struggles to capitalize on its strong gains registered over the past two days and oscillates in a narrow trading band during the Asian session on Tuesday. Spot prices currently trade around mid-1.0800s, nearly unchanged for the day and just below a one-week high touched on Monday. Traders now seem reluctant and prefer to wait for this week's key central bank event risks before placing aggressive directional bets, which, in turn, leads to the EUR/USD pair's subdued range-bound price action. The Federal Reserve (Fed) Chair Jerome Powell's congressional testimony on Wednesday and Thursday will be looked upon for cues about the rate-cut path. This, along with the European Central Bank (ECB) monetary policy decision on Thursday, will help in determining the near-term trajectory for the currency pair. Apart from this, investors this week will confront the release of important US macro data scheduled at the beginning of a new month, including the closely-watched monthly employment details, or the Nonfarm Payrolls (NFP) report on Friday. In the meantime, reduced bets for rapid interest rate cuts by the ECB continue to act as a tailwind for the shared currency. The US Dollar (USD), on the other hand, is undermined by expectations that the Fed will start cutting rates in June and lends support to the EUR/USD pair. That said, a slight deterioration in the global risk sentiment – as depicted by a softer tone around the equity markets – is seen benefitting the safe-haven Greenback and capping the upside for the currency pair. This, in turn, makes it prudent to wait for strong follow-through buying before positioning for the EUR/USD pair's recent goodish rebound from sub-1.0700 levels, or a three-month low touched on February 14. Traders now look to the final Eurozone Services PMIs for some impetus ahead of the US ISM Services PMI.  

Gold price (XAU/USD rallied to a three-month peak on Monday and settled at an all-time high, above the $2,100 mark amid bets that the Federal Reserve (Fed) will start cutting interest rates in June.

Gold price edges lower and snaps a four-day winning streak to a three-month peak.Bets for a June Fed rate cut keep the USD bulls on the defensive and lend support.Geopolitical tensions could also help limit the downside for the safe-haven metal.Gold price (XAU/USD rallied to a three-month peak on Monday and settled at an all-time high, above the $2,100 mark amid bets that the Federal Reserve (Fed) will start cutting interest rates in June. Apart from this, a further escalation of geopolitical tensions in the Middle East turns out to be another factor underpinning the safe-haven precious metal. Bulls, however, opt to take some profits off the table during the Asian session on Tuesday and wait for more cues about the Fed's rate-cut path before positioning for any further appreciating move. Hence, the focus remains on Fed Chair Jerome Powell's semi-annual congressional testimony on Wednesday and Thursday. Apart from this, this week's important US macro releases, including the closely watched Nonfarm Payrolls (NFP) on Friday, will play a key role in determining the next leg of a directional move for the non-yielding Gold price. In the meantime, subdued US Dollar (USD) price action, along with the prevalent cautious mood across the global equity markets, might continue to act as a tailwind for the XAU/USD. Nevertheless, the precious metal, for now, seems to have snapped a four-day winning streak. That said, the aforementioned fundamental backdrop warrants some caution before confirming a near-term top and positioning for any meaningful corrective decline. Daily digest market movers: Gold price might continue to draw support from Fed rate cut bets, geopolitical risks Friday's disappointing US macro data, along with less hawkish comments by Federal Reserve officials, reaffirmed bets for a June rate cut and lifted the Gold price above the $2,100 mark on Monday. The US Dollar, meanwhile, remain on the defensive amid firming expectations for an imminent shift in the Fed's policy stance, which, along with geopolitical risks, benefit the safe-haven metal. Israel conducted a counter-terrorism operation – the biggest in years – in the Palestinian administrative capital of Ramallah, raising the risk of a further escalation of tensions in the Middle East. Investors look to Fed Chair Jerome Powell's two-day testimony for more cues on the path of interest rates and important US macro data to determine the next leg of a directional move for the XAU/USD. A rather busy week kicks off with the release of the US ISM Services PMI later this Tuesday, though the focus will remain glued to the closely watched US Nonfarm Payrolls (NFP) report on Friday. China’s Premier Li Qiang delivered the opening remarks at the National People's Congress (NPC) annual meeting on Tuesday and said that the foundation of economic recovery is not solid yet. Earlier Reuters reported, citing an official work report, that China will target around 5% GDP growth for 2024, though it fails to boost investors' confidence or provide any impetus to the XAU/USD. Technical Analysis: Gold price could consolidate or witness a modest pullback amid overbought RSI on the daily chart From a technical perspective, the overnight strong move-up reaffirmed last week's breakout through the $2,062-2,064 strong horizontal barrier and support prospects for additional gains. That said, the Relative Strength Index (RSI) on the daily chart is already flashing overbought conditions and makes it prudent to wait for some near-term consolidation or a modest pullback before the next leg up. Nevertheless, the Gold price remains on track to surpass the $2,020-2,025 intermediate hurdle and aim to retest the all-time peak, around the $2,144-2,145 zone touched early December. On the flip side, the $2,100 round figure now seems to protect the immediate downside. Any subsequent decline might now be seen as a buying opportunity and remain limited near the aforementioned resistance breakpoint, now turned support, near the $2,064-2,062 region. That said, a convincing break below the latter might prompt some technical selling and drag the Gold price further towards the 50-day Simple Moving Average (SMA), currently pegged near the $2,037-2,035 region. The corrective slide could extend further towards the $2,020 area or the 100-day SMA. US Dollar price today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.  USDEURGBPCADAUDJPYNZDCHFUSD  0.00% 0.00% 0.02% 0.03% -0.01% 0.02% -0.05%EUR-0.01%   0.01% 0.01% 0.01% 0.00% -0.01% -0.03%GBP0.01% 0.00%   0.03% 0.02% 0.00% 0.03% -0.02%CAD-0.02% -0.03% -0.03%   -0.03% -0.03% -0.02% -0.05%AUD-0.04% -0.02% -0.03% 0.00%   -0.02% -0.02% -0.05%JPY0.01% 0.02% -0.02% 0.04% 0.00%   0.03% -0.03%NZD-0.03% -0.02% -0.04% -0.01% 0.01% -0.04%   -0.03%CHF0.04% 0.03% 0.03% 0.06% 0.07% 0.03% 0.06%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

West Texas Intermediate (WTI) oil prices continue to decline for the second consecutive session, with prices hovering near $78.20 per barrel on Tuesday.

WTI price loses ground despite the OPEC+ extension of oil output cuts by 2.2 million bpd.Hamas and Egyptian mediators continue the ceasefire talks in Cairo in the absence of the Israeli delegation.China’s aim to achieve a 5% GDP growth target in 2024 is anticipated to bolster fuel consumption.West Texas Intermediate (WTI) oil prices continue to decline for the second consecutive session, with prices hovering near $78.20 per barrel on Tuesday. Despite efforts by OPEC+ countries, including Russia, to implement voluntary oil output cuts, Crude oil prices are facing downward pressure. The Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) have agreed to extend voluntary oil output cuts totaling 2.2 million barrels per day (bpd) into the second quarter. Saudi Arabia has announced its intention to prolong its voluntary 1 million barrels per day output cut. Russia has also committed to reducing its oil output and exports by an additional 471,000 bpd. Additionally, Iraq and the UAE have agreed to continue reducing their output by 220,000 bpd and 163,000 bpd, respectively. Hamas and Egyptian mediators continue discussions in Cairo aimed at securing a ceasefire in Gaza. Despite pressure from Washington for a truce, Israel has opted not to send a delegation. According to Reuters, Israel's decision stems from Hamas' failure to provide a list of hostages taken on October 7 who are still alive. Additionally, Houthi Telecommunications Minister Misfer Al-Numair stated on Monday that ships must acquire permission from the Houthi-controlled Maritime Affairs Authority before entering Yemeni waters. China has pledged to revamp its economy amidst sluggish growth since the COVID-19 pandemic. The nation vows to "transform" its economic development model and address industrial overcapacity. Setting an economic growth target for 2024 at around 5%, akin to last year's objective, aligns with analysts' projections. Achieving this target is anticipated to bolster fuel consumption by the world's largest Crude importer, thereby supporting Crude oil prices.  

Indian Rupee (INR) edges lower on Tuesday amid the modest rebound of the US Dollar (USD).

Indian Rupee (INR) trades on a softer note on the modest US Dollar demand.Analysts said global economic growth is likely to surprise on the upside, and only modest headwinds for India next fiscal.Investors await the Indian S&P Global Services PMI and the US ISM Services PMI for February on Tuesday.Indian Rupee (INR) edges lower on Tuesday amid the modest rebound of the US Dollar (USD). India’s GDP grew at its fastest pace in 18 months, expanding 8.4% over a year earlier in the October-December quarter. Additionally, most high-frequency indicators continued to grow, showing signs of resilient economic activity.

Furthermore, most high-frequency indicators continued to improve, indicating strong economic activity. S&P Global Ratings Global Chief Economist, Paul Gruenwald said that global economic growth is likely to surprise on the upside, and hence he sees only modest headwinds for India next fiscal.

Market players will keep an eye on the Indian S&P Global Services PMI and US ISM Services PMI for February, due on Tuesday. Later this week, the attention will be on the Fed's Chair Jerome Powell testifying on Wednesday ahead of the US Nonfarm Payrolls (NFP) on Friday.Daily Digest Market Movers: Indian Rupee weakens amid the uncertaintiesIndia's GDP growth is projected to grow 6.8% for the 2024 calendar year from 6.1% earlier, according to the global rating agency Moody's. The Reserve Bank of India (RBI) is expected to take delivery of a $5 billion FX swap due next week, owing to adequate dollar inflows and rupee liquidity staying on the tighter side. India's foreign exchange reserves rose by $2.975 billion to $619.072 billion for the week ending on February 23, according to the RBI. Indian S&P Global Services PMI is estimated to improve from 61.8 in January to 62.0 in February. Fed President Raphael Bostic said on Monday that the central bank is under no urgent pressure to cut interest rates given a "prospering" economy and job market.Technical Analysis: Indian Rupee inches lower within a longer-term band of 82.65-83.15Indian Rupee trades weaker on the day. USD/INR remains confined within a multi-month-old descending trend channel between 82.65 and 83.15 since December 8, 2023.

USD/INR keeps the bearish vibe unchanged in the near term as the pair holds below the 100-day Exponential Moving Average on the daily timeframe. Additionally, the 4-day Relative Strength Index (RSI) lies in the bearish territory below the 50.0 midlines, suggesting that further decline looks favorable.

The first downside target will emerge at the lower limit of the descending trend channel at 82.65. Any follow-through selling will see a drop to a low of August 23, and finally a low of June 1 at 82.25.

On the upside, the key resistance level is located at 83.00, representing the 100-day EMA and a psychological round figure. A decisive break above the latter will see a rally to a high of January 2 at 83.35, en route to 84.00.US Dollar price todayThe table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the .  USDEURGBPCADAUDJPYNZDCHFUSD  0.04% 0.04% 0.05% 0.09% 0.01% 0.14% -0.01%EUR-0.04%   -0.01% 0.01% 0.03% -0.02% 0.07% -0.01%GBP-0.03% 0.01%   0.01% 0.03% -0.01% 0.11% -0.02%CAD-0.05% -0.01% -0.02%   0.01% -0.03% 0.06% -0.04%AUD-0.10% -0.04% -0.04% -0.02%   -0.05% 0.05% -0.05%JPY-0.01% 0.04% 0.01% 0.05% 0.05%   0.14% -0.02%NZD-0.14% -0.08% -0.11% -0.08% -0.05% -0.12%   -0.10%CHF-0.03% 0.02% 0.00% 0.04% 0.06% -0.02% 0.11%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).Indian Rupee FAQsWhat are the key factors driving the Indian Rupee? The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee. How do the decisions of the Reserve Bank of India impact the Indian Rupee? The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference. What macroeconomic factors influence the value of the Indian Rupee? Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee. How does inflation impact the Indian Rupee? Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

The Sensex 30 and Nifty 50, India’s key benchmark indices, are expected to open on the back foot, as risk-aversion extends into Asian markets.

India’s Nifty and Sensex are set to open in the red on Tuesday after a modest end on Monday.Nifty and Sensex refreshed record highs on Monday amid India’s growth story and the global rally.The focus shifts toward Fed Chair Powell and US Nonfarm Payrolls data due later this week.The Sensex 30 and Nifty 50, India’s key benchmark indices, are expected to open on the back foot, as risk-aversion extends into Asian markets. Gifty Nifty futures are down 0.10% so far, indicating a negative start for the Indian indices. Both Indian indices ended in the green on Monday, taking cues from mostly positive global stocks, led by Japan’s Nikkei 225 index 40,000 feat. Nifty and Sensex continued to capitalize on robust India’s Gross Domestic Product (GDP) data and the global stocks rally. The National Stock Exchange (NSE) Nifty 50 and Bombay Stock Exchange (BSE) Sensex 30 closed about 0.10% on the day near 22,400 and 73,900 respectively, having hit fresh record highs earlier in the session. Stock market news The top performers on Nifty on Monday were NTPC, Power Grid, ONGC, BPCL and HGFC Life Insurance. Meanwhile, the top laggards were JSW Steel, Britannia, Eicher Motors, Mahindra & Mahindra and SBI Life Insurance. Moody's raises India's 2024 GDP growth estimate to 6.8% from 6.1%. Godrej Properties shares rose 2% on plans to construct a township project in North Bengaluru with a booking value of ₹5,000. Suzlon, Inox Wind tanked 5% as Centre weighs reverse auctions of wind power. Paytm fell 3% amid speculations over Paytm Payments Bank license. India’s manufacturing sector climbed to a five-month high of 56.9 in February on Friday. The US stock markets closed higher on Friday even as business activity in the US manufacturing sector contracted at an accelerating pace in February, with the ISM Manufacturing PMI dropping to 47.8 from 49.1 in January, missing the market expectation of 49.5 by a wide margin. On Thursday, the key US Personal Consumption Expenditures (PCE) Price Index increased 0.4% for the month and 2.8% from a year ago, as expected. Markets are currently pricing in about a 30% chance that the Fed could begin easing rates in May, slightly higher than a 20% chance a week ago, according to the CME FedWatch Tool. For the June meeting, the probability for a rate cut now stands at about 71%, up from roughly 60% seen at the start of the previous week. India's Gross Domestic Product (GDP) expanded by 8.4% on an annual basis in the third quarter (October-December), as against 7.6% in the previous quarter, data released by the National Statistical Office (NSO) showed Thursday. It’s a holiday-shortened week for the Indian markets, as they will be closed, in observance of the Mahashivratri festival on Friday. The main event risks for markets this week will be the US Federal Reserve (Fed) Chair Jerome Powell’s testimony and the all-important US Nonfarm Payrolls data. Another event of note includes China's National People's Congress (NPC) meeting which could flag new stimulus measures. Nifty 50 FAQs What is the Nifty 50? The Nifty 50, or simply Nifty, is the most commonly followed stock index in India. It was launched in 1996 by the National Stock Exchange of India (NSE). It plots the weighted average share price of 50 of the largest Indian corporations, offering investors comprehensive exposure to 13 sectors of the economy. Each corporation's weighting is based on its “free-float capitalization”, or the value of all its shares readily available for trading. What factors drive the Nifty 50? The Nifty is a composite so its value is dependent on the performance of the companies that make up the index, as revealed in their quarterly and annual results. Another factor is government policies, such as when in 2016 the government decided to demonetize 500 and 1000 Rupee banknotes. This led to a temporary cash shortage which negatively impacted the Nifty. The level of interest rates set by the Reserve Bank of India is a further factor as it determines the cost of borrowing. Climate change, pandemics and natural disasters are also drivers. What are the key milestones for the Nifty 50? The Nifty 50 was launched on April 22, 1996 at a base level of 1,000. Its highest recorded level to date is 22,097 achieved on January 15, 2024 (this is being written in Feb 2024). The index first closed above the 10,000 level on October 17, 2017. The Nifty recorded its biggest daily decline on March 23, 2020 during the Covid pandemic, when it fell 1,125 points or 12.37%. The Nifty’s biggest gain in a single day occurred on May 18, 2009, when it rose 651 points after the results of the Indian elections. What are some of the major companies in the Nifty 50? Major corporations in the Nifty 50 include HDFC Bank, Reliance Industries, ICICI Bank, Tata Consultancy Services, Larsen and Toubro, ITC Ltd, Housing Development Finance Corporation Ltd and Kotak Mahendra Bank.

The Australian Dollar (AUD) consolidates with a negative bias on Tuesday after experiencing losses in the previous session, possibly due to prevailing risk-off sentiment amid a stagnant ASX 200 Index.

Australian Dollar remains tepid, possibly influenced by a risk-off sentiment.Australian Services PMI rose to a ten-month high of 53.1 in February, against 49.1 prior.China aims for 5% GDP growth in 2024 by creating jobs and defusing risks.US Dollar maintains stability despite lower US Treasury yields.The Australian Dollar (AUD) consolidates with a negative bias on Tuesday after experiencing losses in the previous session, possibly due to prevailing risk-off sentiment amid a stagnant ASX 200 Index. Additionally, China aims for approximately 5% GDP growth in 2024 by focusing on job creation and risk mitigation. Chinese authorities emphasize the importance of continuing proactive fiscal policies and prudent monetary measures. Australian Dollar remains unaffected by the positive performance of the Judo Bank Services Purchasing Managers Index (PMI), which surged to a ten-month high of 53.1 in February. This increase pushed the index above the 50.0 threshold, indicating expansion, and surpassed the previous reading of 49.1. Additionally, the Composite PMI rose to 52.1 compared to the previous 49.0, marking a nine-month high. Traders are now awaiting the release of the Gross Domestic Product (GDP) data for the fourth quarter of 2023 on Wednesday. The US Dollar Index (DXY) remains relatively unchanged, displaying a sideways movement amid subdued US Treasury yields. Market participants are closely eyeing crucial United States (US) employment figures scheduled for release this week as they assess the Federal Reserve's (Fed) potential future actions. Fed Chairman Jerome Powell is set to testify before the US Congress' House Financial Services Committee regarding the Fed's Semi-Annual Monetary Policy Report on both Wednesday and Thursday, which could provide further insights into the central bank's stance and upcoming policy decisions. Daily Digest Market Movers: Australian Dollar consolidates amid a flat equity market Australian Current Account Balance rose to 11.8 billion in the fourth quarter of 2023, against the expected 5.6 billion and 1.3 billion prior. ANZ-Roy Morgan Australian Consumer Confidence index declined to 81.0, from the previous reading of 83.2. This latest figure represents the lowest level recorded thus far in 2024. Australia Melbourne Institute Inflation for February showed a year-over-year rise of 4.0%, lower than the previous rise of 4.6%. Australian Building Permits (MoM) declined by 1.0% in January, contrary to the expected rise of 4.0%. Nevertheless, this figure represented an improvement from the previous decrease of 10.1%. Australia’s TD Securities Inflation (MoM) decreased by 0.1% in February, lower than the previous rise of 0.3%. Australian Bureau of Statistics released Company Gross Operating Profits (QoQ), rising by 7.4% in the fourth quarter of 2023 against the expected 1.8% increase and the previous decrease of 1.6%. Australian Building Permits (YoY) rose by 10% in January, swinging from the previous decline of 24%. Judo Bank Manufacturing PMI indicated a slight improvement in Australia's manufacturing sector, with the February reading rising to 47.8 from 47.7 in the previous period. The seasonally adjusted Australian Retail Sales (MoM) grew by 1.1% in January, lower than expected 1.5% but swinging from the previous decline of 2.7%. Australian Private Capital Expenditure improved by 0.8% in the fourth quarter of 2023, from the expected 0.5% and 0.6% prior. According to Matthew De Pasquale, an Economist at Judo Bank, the February Services PMI suggests that the sector has achieved a soft landing in 2023 and is now witnessing a resurgence in activity in early 2024. While the resilience in business activity bodes well for economic growth and employment, it casts doubt on the likelihood of inflation returning to target within the Reserve Bank of Australia's forecast timeline. China's National People's Congress (NPC) spokesman Lou Qinjian shared with the news media that Congress will hold its annual meeting in Beijing from March 5 to March 11. Lou stated that the government “will make new laws to deepen economic reform including financial institutional reform to promote private companies.” Moreover, the Premier of the People's Republic of China (PBoC), Li Qiang is expected to reveal China's economic growth target of around 5% at the session on Tuesday. Atlanta Federal Reserve (Fed) President Raphael Bostic made headlines on Monday, expressing uncertainty about achieving a soft landing. He does not foresee consecutive rate cuts when they commence but still expects two 25-basis point rate cuts in 2024. While inflation is expected to return to the 2% target, Bostic believes it is premature to declare victory. According to the CME FedWatch Tool, there is a 3.0% probability of a 25 basis points rate cut in March, while the likelihood of cuts in May and June stands at 21.8% and 50.9%, respectively. US ISM Manufacturing PMI (Feb) dropped to 47.8 from 49.1, surprisingly missing the market expectation 49.5. The US Michigan Consumer Sentiment Index declined to 76.9 in February, falling below the market expectation of remaining unchanged at 79.6. US Personal Consumption Expenditure (PCE) Price Index grew by 2.4% YoY in January, against the 2.6% prior, in line with the market expectation. The index increased by 0.3% month-over-month, against 0.1% prior. Technical Analysis: Australian Dollar hovers above the psychological level of 0.6500 The Australian Dollar is trading around 0.6510 on Tuesday. Immediate resistance is noted near the 21-day Exponential Moving Average (EMA) at 0.6533, followed by the 23.6% Fibonacci retracement level at 0.6543 and the major level of 0.6550. A break above this resistance zone could lead the pair towards the psychological level of 0.6600. On the downside, key support is seen at the psychological level of 0.6500, followed by the previous week’s low at 0.6486. If breached, the pair may target the area around the major support level of 0.6450 and February’s low at 0.6442. AUD/USD: Daily Chart Australian Dollar price today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.  USDEURGBPCADAUDJPYNZDCHFUSD  0.05% 0.01% 0.01% -0.01% 0.00% 0.06% 0.02%EUR-0.05%   -0.05% -0.05% -0.10% -0.04% -0.02% -0.02%GBP0.00% 0.05%   -0.01% -0.05% 0.00% 0.04% 0.04%CAD-0.01% 0.06% 0.01%   -0.05% 0.01% 0.04% 0.04%AUD0.01% 0.10% 0.05% 0.03%   0.05% 0.07% 0.08%JPY0.00% 0.05% -0.02% 0.00% -0.04%   0.03% 0.02%NZD-0.04% 0.03% -0.05% -0.04% -0.05% -0.04%   0.01%CHF-0.03% 0.01% -0.04% -0.04% -0.05% -0.04% 0.02%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

The Japanese Yen (JPY) ticks higher during the Asian session and reverses a part of the previous day's losses after data released on Tuesday showed that consumer inflation in Tokyo – Japan's capital city – rebounded from 22-month lows in February.

The Japanese Yen attracts some buyers in reaction to stronger Tokyo CPI print.Subdued USD price action contributes to the USD/JPY pair’s modest downtick.Traders now seem reluctant and prefer to wait for the US macro data/event risks.The Japanese Yen (JPY) ticks higher during the Asian session and reverses a part of the previous day's losses after data released on Tuesday showed that consumer inflation in Tokyo – Japan's capital city – rebounded from 22-month lows in February. This comes on top of speculations that another substantial round of pay hikes this year by Japanese firms could fuel consumer spending and demand-driven inflation, opening the door for a potential policy normalization by the Bank of Japan (BoJ). Adding to this, speculations that Japanese authorities will intervene in the markets to prop up the domestic currency, along with the cautious market mood, underpin the safe-haven JPY. The US Dollar (USD), on the other hand, continues with its struggle to attract any meaningful buyers in the wake of firming expectations for an imminent shift in the Federal Reserve's (Fed) policy stance. This turns out to be another factor that contributes to the offered tone surrounding the USD/JPY pair, though the downside seems cushioned ahead of the key US macro data and Fed Chair Jerome Powell's congressional testimony. In the meantime, growing acceptance that the Fed will keep interest rates higher for longer should hold back traders from placing aggressive directional bets. This, in turn, warrants some caution before positioning for any further downside for the currency pair. Daily digest market movers: Japanese Yen draws support from reviving bets for an eventual BoJ pivot A rise in Tokyo CPI renews chatter that the Bank of Japan will exit the negative interest rates regime in the coming month and provides a modest lift to the Japanese Yen. The Statistics Bureau reported that consumer inflation in Japan's capital rebounded to the 2.5% YoY rate in February from a 22-month low of 1.6% in the previous month. Meanwhile, a core reading, which excludes both energy and fresh food, fell to 3.1% last month from 3.3% in January, though remained above the BoJ’s 2% annual target. Sticky inflation, along with expectations for another bumper pay hike this year, should allow the BoJ to end its ultra-loose monetary policy settings sooner rather than later. The au Jibun Bank Service PMI for Japan was finalized at 52.9 for February as compared to the preliminary estimate of 52.5 and the 53.1 registered in the previous month. Japan's economy minister, Yoshitaka Shindo, denied a media report over the weekend that Japan is considering calling an end to deflation  in the wake of rising prices. The US Dollar bulls remain on the defensive amid firming expectations that the Federal Reserve will eventually start cutting interest rates at the June policy meeting. Atlanta Fed President Raphael Bostic does not anticipate back-to-back rate cuts when they begin and still expects only two 25-basis point rate cuts by the end of this year. Bostic further said that inflation is on track to return to the 2% target, but he needs to see more progress and gain confidence in disinflation before voting to reduce policy rates. Traders now seem reluctant and prefer to wait on the sidelines ahead of this week's important US macro releases, starting with the ISM Services PMI later this Tuesday. The focus, however, remains on Fed Chair Jerome Powell's semi-annual congressional testimony on Wednesday and Thursday, and the US Nonfarm Payrolls (NFP) on Friday. Technical analysis: USD/JPY is likely to find decent support near the 150.00 psychological mark From a technical perspective, the USD/JPY pair has been oscillating in a familiar range over the past three weeks or so. This constitutes the formation of a rectangle on short-term charts. Against the backdrop of a rally from the December 2023 low, this might still be categorized as a bullish consolidation phase. Moreover, oscillators on the daily chart are holding comfortably in the positive territory and suggest that the path of least resistance for spot prices is to the upside. That said, it will still be prudent to wait for a sustained breakout through the trading range hurdle, around the 150.75-150.85 region, which coincides with the YTD peak touched in February, before positioning for any further gains. The USD/JPY pair might then surpass the 151.00 mark and accelerate the momentum towards the 151.45 intermediate resistance en route to the 152.00 neighbourhood, or a multi-decade peak set in October 2022 and retested in November 2023. On the flip side, the 150.00 psychological mark now seems to protect the immediate downside. Any further decline is likely to attract fresh buyers near last week's swing low, around the 149.20 area. This is followed by the 149.00 mark, which if broken might shift the bias in favour of bears. The subsequent could drag the USD/JPY pair to the 148.30 support en route to the 148.00 mark and the 100-day Simple Moving Average (SMA), currently pegged near the 147.80 region. Japanese Yen price today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Pound Sterling.  USDEURGBPCADAUDJPYNZDCHFUSD  0.06% 0.02% 0.03% 0.02% -0.01% 0.08% 0.04%EUR-0.06%   -0.05% -0.02% -0.06% -0.05% -0.01% -0.01%GBP-0.01% 0.04%   0.01% 0.00% -0.01% 0.06% 0.04%CAD-0.03% 0.03% -0.01%   -0.05% -0.03% 0.03% 0.02%AUD-0.02% 0.05% 0.00% 0.03%   -0.01% 0.06% 0.06%JPY0.00% 0.07% 0.00% 0.03% 0.01%   0.10% 0.04%NZD-0.08% 0.00% -0.07% -0.05% -0.04% -0.08%   0.00%CHF-0.05% 0.01% -0.04% -0.03% -0.03% -0.06% 0.02%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote). Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation. How does the differential between Japanese and US bond yields impact the Japanese Yen? The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

China's Services Purchasing Managers' Index (PMI) unexpectedly fell to 52.5 in February, as against the January reading of 52.7, the latest data published by Caixin showed on Tuesday.

China's Services Purchasing Managers' Index (PMI) unexpectedly fell to 52.5 in February, as against the January reading of 52.7, the latest data published by Caixin showed on Tuesday. The market forecast was for a 52.9 print.     

China Caixin Services PMI came in at 52.5 below forecasts (52.9) in February

The USD/CHF pair consolidates in a narrow trading range around the mid-0.8800s during the early Asian session on Tuesday.

USD/CHF oscillates around 0.8855 in Tuesday’s early Asian session.Fed’s Bostic said it will likely be appropriate to approve two quarter-point rate cuts by the end of this year. The Swiss CPI eased to 1.2% in February from 1.3% in January, better than expected. The USD/CHF pair consolidates in a narrow trading range around the mid-0.8800s during the early Asian session on Tuesday. The Institute for Supply Management (ISM) will publish the US Services PMI report later in the day, which is estimated to ease from 53.4 in January to 53.0 in February. At press time, USD/CHF is trading at 0.8855, gaining 0.08% on the day. 

Atlanta Fed President Raphael Bostic said that the US central bank is under no urgent pressure to cut interest rates given a strong economy and job market. Bostic further stated that it will likely be appropriate for the Fed to approve two quarter-point rate cuts by the end of this year. Financial markets also believe that the Fed will cut its benchmark interest rate this year. According to the CME Group’s FedWatch tool, investors have priced in a 99.5% chance of at least one rate cut by December. 

On Monday, the Swiss Consumer Price Index (CPI) eased to 1.2% in February from 1.3% in January, better than the market expectation of 1.1%. This figure was the lowest inflation rate since October 2021. 

The US ISM Services PMI will be due on Tuesday. On Wednesday, investors will monitor Fed's Chair Jerome Powell's testify. The hawkish comments from the Fed officials might boost the Greenback and create a tailwind for the USD/CHF pair. The highlight this week will be the US employment data, including Nonfarm Payrolls (NFP), Average Hourly Earnings and Unemployment Rate.         

China’s Premier Li Qiang delivered the opening remarks at the National People's Congress (NPC) annual meeting on Tuesday.

China’s Premier Li Qiang delivered the opening remarks at the National People's Congress (NPC) annual meeting on Tuesday. Key quotes Foundation of China's economic recovery is not solid yet. China's domestic demand is not strong, social expectations are relatively weak. Some small and medium-sized enterprises facing operating difficulties. Earlier on, Reuters reported, citing an official work report, China will target around 5% GDP growth for 2024.

The People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1027 as compared to the previous day's fix of 7.1020 and 7.1961 Reuters estimates.

The People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1027 as compared to the previous day's fix of 7.1020 and 7.1961 Reuters estimates.

Ireland Purchasing Manager Index Services: 54.4 (February) vs 50.5

The USD/CAD pair holds below the 1.3600 barrier during the early Asian trading hours on Tuesday.

USD/CAD remains flat around 1.3575 in Tuesday’s early Asian session. Fed’s Bostic said there’s no urgency to cut interest rates given the US economy's strength. The BoC is expected to hold rates at 5% at its June meeting on Wednesday.The USD/CAD pair holds below the 1.3600 barrier during the early Asian trading hours on Tuesday. The Bank of Canada (BoC) will announce the interest rate decision on Wednesday, with no change in rate expected. Meanwhile, the decline in oil prices weighs on the Loonie and provides some support to the USD/CAD pair. At press time, the pair is trading at 1.3575, unchanged for the day. 

The Federal Reserve (Fed) is expected to maintain the benchmark interest rate in the 5.25% to 5.5% range at its March meeting. The financial market has priced in the first rate cuts in June, but this might change if inflation stalls or wages continue to beat forecasts. Fed President Raphael Bostic said on Monday that the central bank is under no urgent pressure to cut interest rates given a prospering economy and job market. 

On the other hand, the Bank of Canada (BoC) is widely expected to hold its key interest rate at 5.0% on Wednesday. Investors have priced an 80% odd that the first rate cut to come in around June. The press conference might offer some hints about the timing of rate cuts. Dovish remarks from the BoC governor could exert some selling pressure on the Canadian Dollar (CAD). 

Market players will focus on the US ISM Services PMI, which is estimated to ease from 53.4 in January to 53.0 in February. Later this week, Fed Chairman Jerome Powell’s Senate testimony will be a closely watched event ahead of the US Nonfarm Payrolls (NFP) on Friday.   

Australia Current Account Balance came in at 11.8B, above expectations (5.6B) in 4Q

Japan Jibun Bank Services PMI increased to 52.9 in February from previous 52.5

Japan's Economy Minister Yoshitaka Shindo said on Tuesday that the Japanese government is not thinking of declaring anything when he was asked about considering announcing the end of deflation.

Japan's Economy Minister Yoshitaka Shindo said on Tuesday that the Japanese government is not thinking of declaring anything when he was asked about considering announcing the end of deflation. Key quotes“Not thinking now of declaring anything, when asked whether the government could call an end to deflation.”

“Will look at various indicators in making a decision, when asked whether the government could call an end to deflation.”

“Will strive to ensure japan sees wage growth exceeding inflation so that it won't revert to deflation.”Market reactionAt the time of writing, USD/JPY is trading 0.03% lower on the day at 150.45.

New Zealand ANZ Commodity Price: 3.5% (February) vs 2.2%

The headline Tokyo Consumer Price Index (CPI) for February rose 2.6% YoY from 1.6% in the previous reading, the Statistics Bureau of Japan showed on Tuesday.

The headline Tokyo Consumer Price Index (CPI) for February rose 2.6% YoY from 1.8% in the previous reading, the Statistics Bureau of Japan showed on Tuesday. Meanwhile, the Tokyo CPI ex Fresh Food, Energy eased to 3.1% YoY from 3.3% in January.

Additionally, Tokyo CPI ex Fresh Food climbed to 2.5% for the said month, in line with the market expectation.Market reactionAs of writing, the USD/JPY pair was down 0.06% on the day at 150.43.About Tokyo Consumer Price Index (CPI)The Tokyo Consumer Price Index is released by the Statistics Bureau and it's a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services. The index captures inflation in Tokyo. CPI is the most significant way to measure changes in purchasing trends. The purchase power of JPY is dragged down by inflation. Generally a high reading is seen as positive.

Japan Tokyo CPI ex Food, Energy (YoY) remains unchanged at 3.1% in February

Japan Tokyo Consumer Price Index (YoY) rose from previous 1.6% to 2.6% in February

Japan Tokyo CPI ex Fresh Food (YoY) meets forecasts (2.5%) in February

The NZD/USD pair remains capped under the 0.6100 mark during the early Asian session on Tuesday.

NZD/USD posts modest gains around 0.6095 in Tuesday’s early Asian session. Fed’s Bostic said the Fed is under no urgent pressure to cut interest rates given a strong economy. China will deliver a top annual political event, which might ease the fear about the fate of the Chinese economy.The NZD/USD pair remains capped under the 0.6100 mark during the early Asian session on Tuesday. Financial markets will be cautious this week as they await economic data and policy guidance. The US February ISM Services PMI will be due later in the day. The pair currently trades near 0.6095, up 0.02% on the day.  Atlanta Fed President Raphael Bostic said that the Federal Reserve (Fed) is under no urgent pressure to cut interest rates given a strong economy and job market. Bostic further stated that it will likely be appropriate for the Fed to approve two quarter-point rate cuts by the end of this year. San Francisco Fed President Mary Daly said central bank officials are ready to lower interest rates as needed but emphasized there's no urgent need to cut given the strength of the economy. 

Investors will take more cues from Fed's Chair Jerome Powell's testimony on Wednesday, which might offer some hints about a broad overview of the economy and monetary policy. The hawkish remarks might lift the US Dollar (USD) and act as a headwind for the NZD/USD pair. 

China’s economy has been roiled by a property sector crisis, raising concern about the health of the second-largest economy in the world. Market players will monitor the National People's Congress to see what's on offer when it starts on Tuesday. The development surrounding the stimulus plan from Chinese authorities could boost the China-proxy New Zealand Dollar (NZD) and cap the downside of the NZD/USD pair. 

Looking ahead, the US ISM Services PMI will be due on Tuesday, along with the final S&P Global Services PMI, Factory Orders, and the RCM/TIPP Economic Optimism Index. Additionally, the Fed’s M. Barr is set to speak. These events could give a clear direction to the NZD/USD pair.   

South Korea Gross Domestic Product Growth (YoY) unchanged at 2.2% in 4Q

South Korea Gross Domestic Product Growth (QoQ) remains unchanged at 0.6% in 4Q

GBP/USD climbed into the 1.2700 handle on Monday before falling back, paring away some of the day’s gains but hitting the rollover higher than it started.

BRC Like-For-Like Retail Sales the biggest-hitting UK data this week.US NFP looms ahead on Friday, ADP employment preview on Wednesday.Fed rate cut hopes are on the rise once again, but Fed Chair Powell remains a threat.GBP/USD climbed into the 1.2700 handle on Monday before falling back, paring away some of the day’s gains but hitting the rollover higher than it started. The UK sees only a thin showing on the economic calendar this week, and another US Nonfarm Payrolls (NFP) labor print on Friday sees investors gearing up for another kick at the can on how soon the Federal Reserve (Fed) will begin cutting interest rates. Tuesday’s UK BRC Like-For-Like Retail Sales for the year ended February are expected to print at 1.6% YoY versus the 1.4% previous. On the US side for Tuesday, the ISM Services Purchasing Managers Index (PMI) for February is forecast to tick lower to 53.0 from the previous month’s 53.4. US labor figures feature heavily this week, with ADP Employment Change on Wednesday followed by Friday’s NFP report. ADP Employment Change is forecast to jump to 150K for February versus the previous 107K, while this Friday’s NFP is currently forecast to fall back to 200K from the previous 353K. Fed Chairman Jerome Powell will also be making an appearance this week, testifying before the US Congress’ House Financial Services Committee regarding the Fed’s Semi-Annual Monetary Policy Report. Plenty of soundbites and headlines are expected over the two day central bank showing, beginning on Wednesday and wrapping up Thursday. GBP/USD technical outlook GBP/USD found a hard technical barrier at the 1.2700 handle on Monday, but the pair managed to eke out a thin gain on the day, gaining around a quarter of a percent by the closing bell. The pair continues to find technical support from the 200-day Simple Moving Average (SMA) at 1.2578, but near-term technical resistance at 1.2700 is capping off bullish momentum and preventing a topside recovery into last December’s peak bids near 1.2800. GBP/USD hourly chart GBP/USD daily chart  

Australia's Judo Bank Services Purchasing Managers Index rose to a ten-month high of 53.1 in February, climbing back above the 50.0 contractionary level and climbing over the previous print of 49.1.

Australia's Judo Bank Services Purchasing Managers Index rose to a ten-month high of 53.1 in February, climbing back above the 50.0 contractionary level and climbing over the previous print of 49.1. The Judo Bank Australian Composite PMI also climbed to 52.1 versus the last 49.0, a nine-month high.  Services activity rose for the first time in five months, and at its fastest rate since last April, according to S&P Global. According to Matthew De Pasquale, Economist at Judo Bank: The February Services PMI indicates that the sector has reached a soft landing in 2023 and is now experiencing a resurgence in activity in early 2024. Though the resilience in business activity is good for economic growth and employment, it raises doubts about the likelihood that inflation will back to target under the RBA's forecast timeline. About the S&P Global Judo Bank Australia Services PMI The Services Purchasing Managers Index (PMI), released on a monthly basis by Judo Bank and S&P Global, is a leading indicator gauging business activity in Australia’s services sector. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for AUD.

The XAU/USD is currently trading multi-month highest around $2,115 as investors continue digesting last week’s weak inflation and economic activity figures from the US.

The XAU/USD is currently trading at $2,115, its highest since early December.The underlying strength in gold stems from softer US inflation numbers and soft economic data reported last week.Investors are discounting higher odds for the Fed’s easing cycle to start in June.Labor market figures from the US will continue modeling the expectations.The XAU/USD is currently trading multi-month highest around $2,115 as investors continue digesting last week’s weak inflation and economic activity figures from the US. As for now Market anticipations for a rate cut only start to heighten moving closer to May and significantly by June. The non-yielding yellow metal is benefitting ahead of the critical labor market data from the US expected this week, even though the general tone of data remains firm which would justify the delay of the easing cycle from the Federal Reserve (Fed). The yellow metal started gaining momentum last Thursday, after the report of soft Core Personal Consumption Expenditures (PCE) figures from January and followed on Friday after the release of weak Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) for February which raised concerns on an economic slowdown. However, the Fed officials, remain firm, and attach themselves to the rhetoric of three rate cuts in 2024, starting most likely in June. If markets reaffirm their bets on the easing starting in June, the US Treasury yield may get a boost, which could limit the upside to the metal. XAU/USD technical analysis On the daily chart for the XAU/USD, the bulls are clearly in command with the Relative Strength Index (RSI) being stationed in the overbought territory. The Moving Average Convergence Divergence (MACD) with rising green bars supports this bullish outlook, indicating increased positive momentum. However, as the price starts to hint at overbought signals, a correction may be forthcoming to consolidate recent gains. In the wider context, the XAU/USD pair remains above the 20,100 and 200-day Simple Moving Averages (SMAs), signifying that bullish sentiment still prevails in the long term. XAU/USD daily chart  

Australia Judo Bank Services PMI: 53.1 (February) vs 52.8

Australia Judo Bank Composite PMI rose from previous 51.8 to 52.1 in February

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